ye, eurusd - usdchf is in the highly correlated area of about -93%ish…that means that they move in opposite directions in a very strong relationship. as for gbpusd and aud usd…i don’t know what correlation method you are using to gather the correlation for gbpusd and audusd…but my methods sugges that the between the two is weak, if it exists at all–so, you should disregard this pair, and not involve it in your trades if you were trading this strategy.
select only gbpusd and audusd, look through the results, i don’t view them as that strong…others might though
ye, i trade 80 and above
If the USD goes down then GBP and AUD go up
This is not true
If the value of the USD goes down the exchange rate between it and other currency will change.
The perceived value of some other currency (singular) will not necessarily change.
I think this is an important distinction to make clear.
I’m looking at my usual 30M t/f…they look very highly negatively correlated there. So what timeframe do you look at?
I look at all of them online; however, in mt4 i use the daily tf to determine the correlations. the online perspective lets me get an overall view of how the correlations are behaving…correlations can spike up and down–thereby throwing a particular tf out of whack–so i try and get the best overall view that i can
ooops, my bad. I was using a GBPUSD chart that I was running in visual mode with mt4 strategy tester…thought it was a current chart. Switch over to a current chart and now I see that they are positively correlated…sorry :o
However, good to know 
G/U 4hr chart
What happened here?
Did the value of the pound drop or the value of the dollar go up or both?
You can’t tell from one cross.
E/U 4 hr same dates
Looking at 2 charts and 2 pairs now the dollar might not be making the gains we thought it was based on the first chart. Lets look at one more.
G/J 4 hr same dates
Now we have a different picture it looks like it was the pound that was dropping in the first chart.
This is important if you are picking correlated pairs. By knowing whats going on with each currency you might get an idea which correlation coefficients are going to diverge. E/U and G/U have a positive correlation it broke down some due to a change in the value of the pound. The correlation between E/U and other dollar crosses might not have changed much.
very interesting post shr1k…predicting currency coefficients, while it isn’t necessary to the system, is an extremellyyyyy valuable tool to have handy…regardless of what system you trade. I’ll look into this a bit more today and see what I can come up with 
nice post
Let me first state that I am currently no way on any side of the argument (establishment or anti-establishment). But I got a question as a relatively complete newbie of 2 weeks.
If say EUR/USD is beginning to trend upwards, meaning Euro is growing ‘relatively’ stronger over the USD and then the USD/JPY also happen to be trending up (whether it is because US getting stronger and JPY getting weak is irrelevant), is it safe to ‘rank’ the strength of currencies based on strength?
In this case, EUR strongest, USD 2nd and JPY the weakest. And therefore, there will definitely be an uptrend in EUR/JPY? Is it possible for this uptrend to be delayed somewhat? And therefore catch this?
If say EUR/USD is beginning to trend upwards, meaning Euro is growing ‘relatively’ stronger over the USD and then the USD/JPY also happen to be trending up (whether it is because US getting stronger and JPY getting weak is irrelevant),[B] is it safe to ‘rank’ the strength of currencies based on strength[/B]?
No, it is not.
Because some currencies/pairs at specific times like quarter end are used for other purposes like Dividend Payments for instance. That has an influence on the strength of a currency.
In this case, EUR strongest, USD 2nd and JPY the weakest. And therefore, there will [B]definitely be an uptrend in EUR/JPY[/B]?
EUR/JPY is a “holding basin” for Money Flow in & out of Asia destined for Indexes in the EU & Switzerland.
Is it possible for this uptrend to be delayed somewhat? And therefore catch this?
There are delays but you need to be in sync with the Money Flow to catch this.
If you can’t see & don’t know where the Money is flowing you’ll be late.
Some clowns in here think the “trend” is Money Flow. LOL
It is not.
Thanks to both replies. Not sure If I got both of you right but it opened a new horizon. ATM I’m like a babe in the woods lol
I know, terrible wasn’t it. So unfair on that Jacquille chap. Or was it Xtraction? Or Baby Pipper? Or… I dunno, can’t keep up with which was which. Must be some kinda wierdo to open up all those accounts, just to come in and try and wind things / people up. Very strange, wouldn’t be surprised if the man / woman behind the mask is a bit of a loner in real-life, and considered by those who do know him to be a bit strange and dis-functional.
What do you think MorePips?
AUD/USD and USD/CHF correlate -0.93 on the weekly 50 period
AUD/USD and USD/CHF correlate +0.14 on the hourly 50 period (recently)
I gather your strategy can take advantage of this divergence?
How?
nah my strategy wouldn’t even touch that pair lol
What is it about the currency correlations that you are taking advantage of?
Read the first post.
You’re trading magnitude? The magnitude of the correlation itself? Magnitude of the divergence?
kind of ye…there’s more too it than that but you’re on the right track.
Question about the order of the pairs…does the magnitude determine which pair to buy and which to sell?..assuming positive correlation atm.