Saturday, September 23, 2017

Currency Pairs Related to US Dollar Index

May 2, 2011 by  
Filed under Forex FAQ & Latest Post

In today forex faq, we have a question from one of our fellow traders who has experience in trading index for about 2 years.

Below is his question:

“I have been trading indexes for 2 years and also just started currencies a month ago (particularly usdjpn, usdchf, audusd, eurusd and gbpusd).

To trade them I always have the DOLLAR INDEX as the guide. so if the dollar index is trending up, i would buy the dollars versus its currencies and likewise I would sell on the currencies versus the dollars. And visa versa for a down trend.

So far its been benefiting. but since I am knew with forex, I would like to have this theory confirmed.

Personally I find the US dollar index more related to the USDCHF pair. In fact, when the index is trending up, you will most probably see the USDCHF moving in alignment to it.

As for the other pair, I find them not so much in alignment as compared to the USDCHF. When I am trading the USDCHF, I will usually check the dollar index as part of my trading analysis.

Below is another question from our fellow traders

How do moving average work?

I must say that the moving average is one indicator that I never leave behind in any chart. This is because the moving average has many uses and can be integrated into many different strategies.

You can take a look at my posts on the following area

I hope that this information is useful for your trading and do give your say by commenting below.


4 Responses to “Currency Pairs Related to US Dollar Index”
  1. Dan says:

    I am one of numbers of subscriber on your site because the article here are million dollars worth. I ‘ve burn my account twice but i still have interest in trading but before i go back to it i will like to know some facts. Please, is it true that some Brokers will trade against the customers (traders) or its just our unprofessional trading strategy(ies) and not the brokers.

    • Kelvin says:

      Hi Dan

      Thks for joining my newsletter as a subscriber and I am happy to know that you find my articles useful for you.

      As for your question, I must say that there is no brokers who trade against their customers as they make money from the spread and not your winning or losing. No matter you win or lose, your broker made the same amount of money from the spread they offer. It is usually due to the trader themselves trading with strategies that are not well practice that make them lose their money.

  2. Amit says:

    USDJPY is another pair that correlates in tune with the us-dollar-index many times.. then on the other hand, for the yen to deviate from that correlation, the economic factors also play their role..

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