Use Equities to Find Trends for EUR/USD in Forex Trading

One of the things you can do to help find trends for EUR/USD in forex trading is to look at equities. The way that equities perform often correlates to how well the euro does in forex trading against the U.S. dollar.

Indeed, there is a high correlation, reports GFT's Kathy Lien in  FX360:

In the meantime, currency traders should continue to keep their eyes on equities. Over the past year, there has been an 88 percent positive correlation between EUR/USD and S&P 500. This correlation has increased to 92 percent since the beginning of the year which suggests that if there is no catalyst to move currencies, forex traders will most likely to take their cues from equities. The following chart illustrates the strong correlation between the EUR/USD and S&P 500 over the past few years - there is no reason why the relationship will change this week.