COT Reports AUD/NZD?

Trading Discussion
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I often trade using AUD/NZD. I think the COT reports are very useful (when I trade AUD/USD), however since the COT report is based off data involving the USD futures (so in my case AUD/USD futures), does this mean I cannot use the COT report data for technical analysis when planning an entry point for say an AUD/NZD position? Can I use the AUD/USD and NZD/USD futures data as sentiment indicators for the AUD/NZD? Because what if the AUD/USD futures and NZD/USD futures positions are both strong, where does this indicate sentiment level of the AUD/NZD could be?

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Hello @mkchristie14 excellent question.

Draw up a chart of AudNzd and then overlay a chart of AudUsd first, then one of NzdUsd: whichever of the two parent pairs more strongly correlates to the cross will be the one to monitor in futures and COT.

For example I have been trading the cross EurTry for a while but it has absolutely zero correlation at the moment to EurUsd, and is only following UsdTry, so the ‘Eur’ part of that cross is wholly irrelevant. Equally, it may be that AudNzd correlates more to AudUsd than NzdUsd, or viceversa, so whicever pair has the strongest draw on the cross will be the one to follow (until that correlation changes).

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@PipMeHappy

Thank you so much for the reply and I am thrilled that there is indeed a solution to my question.

Thanks again.

cheers.

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4

What is COT report? and why this report affected on AUD/NZD?

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@mkchristie14 you are welcome. I would be interested to know how you got on with this pair.

You can also use this for a quick look at currency correlations by different time-frames:

https://www.oanda.com/forex-trading/analysis/currency-correlation