Proxy Pairs & Currency Correlation

Hi All,
I'm fairly new to the world of Forex, I've been studying it and learning for the past 4-6 months because we have funds to invest and this seemed to be (academically) up my ally. I'm enjoying the diversity and the entirity of this new venture, but I was wanting to query a few small things of no small consequence.

Proxy Pairs.
I've found the two most common proxy pairs that have been given to me by a coach to be the AUDNZD and the EURUSD. When either of these is up/down, the opposite is weakening, etc. What other pairs can be used as such? Obviously, with the EURUSD controlling more than 60-70% of the markets liquidity, using that as a base point and correlating that across other things like the GBPUSD or the EURJPY can be a very promising pointer. I wanted to know what other STRONG proxy pairs you would recommend, from past experience or general knowledge?

Currency Correlation.
Something I'm very slowly seeping my fingers into!! Stocks go down, USD goes up, Stocks go up, USD goes down. This kind of thing. Oil, gold, these things all cross over with the USD and other currencies. Things like the Dow, too (DJIA) which from memory works much like stocks against or for the USD. What are your thoughts and theories on this?

And I'm sure you'll be seeing many more related posts...

For those curious, my broker is Dukascopy (Suisse) SA. I've never used ones like FXCM or others, though I have Demo-ed a few others.

HAPPY TRADING!!

('Least that bank holiday is over)

First, your coach is wrong! Here's a chart of the correlation between the EURUSD and AUDNZD: http://screencast.com/t/CO55ntvo For about 2 months earlier this year (March/April) they were inversely correlated and the rest of the time they was little or no correlation. This time last year, they were highly positively correlated...go figure! (The indicator at the bottom is correlation and varies between -100 and +100.)

I see a lot of people wasting time trying to discover some proxy that will predict the future of another instrument. Your time would be better spent going long when a pair is going up, going short when it is going down, trading both sides when it is choppy, and standing aside when it is flat.

Pairs randomly move in and out of correlation over time. I wouldn't put my money on a pair based on the performance of another pair.

Wow, that's absolutely true. I must be honest - I don't have a whole lot of faith in the coaches, and now it's almost zilch. The respect I do have for them is that they can make their own money, (lol, go figure). It's still interesting to see when they do correlate though, and when they don't. Obviously, going with the trend is the best thing to do, rather than rely on a potential reversal based on a pair that WAS correlated 6 months beforehand.

Thanks for your post!! A good little eye-opener.