Forex Intermarket Cheat Sheet
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Quick Reference Tables
| DXY Basket | Weight | Notes |
|---|
| EUR | 57.6% | Largest; DXY often inverse to EUR/USD |
| JPY | 13.6% | |
| GBP | 11.9% | |
| CAD | 9.1% | |
| CHF | 4.2% | |
| SEK | 3.6% | |
| Risk-On Assets | Risk-Off Assets |
|---|
| Stocks ↑ | Stocks ↓ |
| AUD, CAD, NZD ↑ | JPY, CHF ↑ |
| JPY, CHF ↓ | AUD, CAD, NZD ↓ |
| Commodities ↑ | Bonds (flight to safety) |
| Commodity Currencies | Linked To | Notes |
|---|
| AUD | Gold, iron ore | Australia exports metals |
| CAD | Oil (WTI) | Canada exports oil |
| NZD | Dairy, agriculture | New Zealand exports |
Key Rules
- Watch DXY for USD bias. Rising DXY = USD strength; falling DXY = USD weakness.
- Gold is inverse to the dollar. Gold up = USD down (typically); gold down = USD up.
- Bonds drive rate expectations. Rising Treasury yields = stronger USD; falling yields = weaker USD.
- Equities lead risk sentiment. S&P up = risk-on (AUD, CAD favored); S&P down = risk-off (JPY, CHF favored).
- Use intermarket to confirm. When bonds, commodities, and equities align, conviction increases.
- Don't fight the broader picture. If DXY, gold, and yields all point one way, avoid fading it.
Dollar Index (DXY)
- Measures USD vs basket of 6 currencies (EUR, JPY, GBP, CAD, CHF, SEK).
- DXY above 100 = dollar stronger than baseline; below 100 = weaker.
- EUR has 57.6% weight—DXY heavily influenced by EUR/USD.
- Use as filter: rising DXY favors USD longs; falling DXY favors USD shorts.
Bonds and Yields
- 10Y Treasury – Key driver of USD expectations. Rising yields = stronger USD.
- Yield differential – US vs Germany (EUR), US vs Japan (JPY). Widening spread = USD strength.
- Inverted yield curve – 2Y > 10Y can signal recession fears; affects risk sentiment.
Gold and Commodities
- Gold vs USD – Inverse correlation. Gold priced in USD; both stores of value.
- Oil – Affects CAD (Canada exports oil). WTI up = CAD up (typically).
- Commodity currencies – AUD, CAD, NZD rise when commodity prices rise.
Equities and Risk Sentiment
- S&P 500 – US risk sentiment. Up = risk-on; down = risk-off.
- Nikkei – Ties to USD/JPY. Japanese investors repatriate when Nikkei falls.
- VIX – Volatility index. Above 20 often signals risk-off.
- Risk-on: AUD, CAD, NZD ↑ | Risk-off: JPY, CHF ↑
Global Liquidity
- QE / Easing – More liquidity; risk assets and commodity currencies often rally.
- Tightening – Less liquidity; USD often strengthens; risk-off flows.
- Watch Fed balance sheet, global M2, central bank rate decisions.
Not financial advice. For educational use only. Forex trading involves substantial risk.