Correlation
Forex Correlation Table
How currency pairs move relative to each other. Essential context for XAUUSD traders.
XAUUSD vs DXY
Gold has a strong inverse correlation with the US Dollar Index. When DXY rises, gold typically falls — and vice versa. This is the most important correlation for XAUUSD traders.
XAUUSD vs EURUSD
EURUSD has a positive correlation with gold. Both typically move up when the dollar weakens. When EURUSD rallies, XAUUSD often follows — useful for confluence confirmation.
XAUUSD vs GBPUSD
GBPUSD shows a moderate positive correlation with gold. Both benefit from USD weakness. Slightly weaker than EURUSD correlation due to UK-specific factors.
XAUUSD vs USDJPY
JPY is a safe-haven currency like gold. Both tend to rise during risk-off periods. USDJPY and XAUUSD often have an inverse relationship — when USDJPY falls (JPY strengthens), gold often rises.
EURUSD vs GBPUSD
These two are among the most correlated pairs in forex. Both are priced against the USD and driven by similar macro factors. Trading both simultaneously increases USD exposure risk significantly.
EURUSD vs USDJPY
These pairs show a negative correlation. When USD weakens vs EUR (EURUSD up), USD often also weakens vs JPY (USDJPY down). Risk appetite drives both — risk-on favors EURUSD, risk-off favors JPY.
How to use correlations in SMC trading:
When you see a bullish BOS on XAUUSD, check if EURUSD is also showing bullish structure — if yes, that confirms USD weakness and increases your confidence in the gold long. If XAUUSD is bullish but DXY is also bullish, be cautious — the correlation suggests one of them may reverse. Use correlations as confluence, not as primary signals. Correlations can weaken or reverse during major fundamental events like NFP, FOMC, or geopolitical risk events.
Forex Correlation Explained
Currency correlation measures how two pairs move relative to each other, from +1 (move together) to -1 (move opposite). Trading strongly correlated pairs in the same direction doubles your risk. Gold (XAUUSD) is typically negatively correlated with the US Dollar Index (DXY) — a weaker dollar usually means higher gold.
Correlations shift over time, so always confirm with the live matrix above. Use correlation to avoid over-exposure (e.g. long EURUSD and long GBPUSD is nearly the same bet) and to confirm bias (a falling DXY supports a long XAUUSD idea).
Frequently Asked Questions
What does currency correlation mean?
Correlation measures how two currency pairs move relative to each other on a scale of +1 to -1. +1 means they move identically, -1 means they move in exact opposite directions, and 0 means no relationship.
Is gold correlated with the US dollar?
Yes — XAUUSD is typically negatively correlated with the US Dollar Index (DXY), usually between -0.6 and -0.8. When the dollar weakens, gold tends to rise, and vice versa.
Which forex pairs are most correlated?
EURUSD and GBPUSD are strongly positively correlated (+0.8 to +0.9), while EURUSD and USDCHF are strongly negatively correlated (-0.8 to -0.95). Trading correlated pairs in the same direction increases risk.
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