What Is Intermarket Analysis?
Intermarket analysis looks at how different financial markets—like currencies, bonds, commodities, and stocks—interact with one another.
This approach helps traders:
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Spot potential trading opportunities
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Confirm signals from other types of analysis
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Detect early signs of trend reversals
Currency movements are often influenced by what's happening in other markets—like changes in commodity prices, bond yields, or stock indexes.
Common Intermarket Relationships
Let’s go through some typical intermarket patterns that traders watch:
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When the U.S. dollar falls, commodity prices often rise
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When bond prices fall (interest rates rise), stocks usually struggle
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When commodities rise, it can signal economic growth, which tends to be good for stocks but bad for bonds
It’s a lot to keep track of—but don’t worry!
Here’s a handy cheat sheet to help you remember some key relationships:
Quick Intermarket Cheat Sheet
| If This Happens | Then This Tends to Happen | Why? |
|---|---|---|
| Gold rises | USD falls | In times of economic fear, investors often turn to gold instead of the U.S. dollar. Gold holds intrinsic value. |
| Gold rises | AUD/USD rises | Australia is the world’s 3rd largest gold producer, so rising gold prices benefit the Aussie dollar. |
| Gold rises | NZD/USD rises | New Zealand is also a significant gold exporter, so the kiwi tends to follow gold prices. |
| Gold rises | USD/CHF falls | About 25% of Switzerland’s reserves are backed by gold. Rising gold = stronger CHF. |
| Gold rises | USD/CAD falls | Canada ranks 5th in global gold production, so a higher gold price supports the CAD. |
| Oil rises | USD/CAD falls | Canada exports millions of barrels of oil to the U.S. Higher oil prices = stronger CAD. |
| Gold rises | EUR/USD rises | Both gold and the euro are seen as alternatives to the U.S. dollar. When gold goes up, EUR often follows. |
| Bond yields rise | Local currency rises | Higher yields attract foreign investment, which boosts demand for the local currency. |
| Dow Jones falls | Nikkei falls | Japan’s economy is closely linked to the U.S., so the Nikkei often follows the Dow. |
| Nikkei falls | USD/JPY falls | Investors turn to the yen as a safe haven during market stress, pushing USD/JPY lower. |