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The underlying assets belonging to the commodity market, bond or shares, are often protagonists of the intermarket analysis. Forex is hardly the main character, except for the dollar which usually reminds of a typical intermarket relationship with commodity prices. Usually, there are few currencies subject to this analysis, and this is a shame because, as we are going to see here below, the unthinkable intermarket links between one currency and a stock index can offer very interesting insights to be applied on any platform that offers online access to the Forex market.

For example, the AudNzd cross is not only expressive of the balance of exchange between the two different economic areas, but also an excellent forerunner cross of the oil price. As we can see from the chart, AudNzd tends to mark the primary top and bottom a few weeks in advance of the oil price. Even if from this point of view we have an exceptional anticipating signal of a drop of the oil in the coming weeks, what we really want to clarify in this case is the opportunity that the Forex offers us to anticipate and interpret the evolution of other markets. Those who work online on Forex can then easily take advantage of these intermarket relationships by opening two positions simultaneously on highly correlated underlings.

Another example: EurAud and the Italian stock index FtseMib have a high positive correlation as they progress together most of the time and allow the trader to operate simultaneously on two tables with profit. Sometimes, however, this intermarket relationship has a break for a few trading days and this is a signal to be exploited by those who work on the online Forex. As we can see from the graph, in fact, a few sessions of divergence on the top / bottom of the FtseMib not followed by EurAud represent a strong input signal from the currency cross in the direction taken by the stock index. Many brokers that operate online on the Forex offer the chance to work through CFDs on stock indices and this amplifies the operational opportunities.

Each currency cross has some peculiarities: sometimes it is closely linked to the performance of commodity currencies, sometimes to bond, or the stock market. Knowing that the direction of NzdJpy is the same one of the MSCI World Index offers online Forex traders a great operational opportunity. As we can see from the chart, in fact, understanding and guessing the direction of the world stock market will allow traders to bet on NzdJpy replicating the movement of the equity, but using a high leverage that will allow them to get much higher profits respect a classic investment in ETFs indexed to the MSCI World Index.

In conclusion, we can say that investigating on the intermarket phenomena inside the Forex market represents a winning method of analysis that can offer the trader investment opportunities not only on FX, but also on dozens of underlying assets quoted on world financial markets.