Most traders stare at their pair and wonder why price is chopping sideways. Pull up oil.
Crude drives risk sentiment and it drags the commodity currencies with it. CAD moves with oil, so USD/CAD moves against it. JPY is a big oil importer, so rising crude tends to pressure the yen. NOK, AUD, and the rest of the risk complex follow the same story. When crude goes flat and rangebound, that energy drains out of the majors too — and you end up forcing setups in a market that has nothing to give.
Correlation isn't a signal on its own. It's context. Know which side of the correlation your pair sits on before you click buy.
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