Predicting the EUR/USD by using Currency Correlations

Myself for sure not. But an Australian airline buying three aircraft to Airbus will move E/A up. E/U and A/U will only reflect this. This exchange of 230M AUD to 150M€ is what will make the values of the E/U and A/U change. At least for a short time. It makes no difference whether or not their bank will convert first to USD for liquidity reason.

That's correct. The value of the E/A changed because there was an increased demand in the euro and a decrease in demand for the aud. Has nothing to do with the E/A as a trading instrument, it's just that the E/A changed as a result of the transaction.

wow. Great to see this brought up here. I've made the switch from FX over to futures and the DX is my primary trade using precisely this methodology and it works.

When you can overlay the two on a chart, it's crazy. (ThinkOrSwim here..)

So, I have two main chart setups:

1) DX with a EUR overlay. 2m, 5m, 15m, 1h

- other chart packs: daily/weekly
- individual 30m
- individual 4h

2) EUR (57.6), JPY(13.6), GBP(11.9), CAD(9.1) with DX overlay. This setup is "order of magnitude" for contributors to the DX by %. I did have this pack set with USD/SEK and the CHF, but I dropped em - didn't seem to help that much having those. These are all just 30m charts.

See 2 of the 4 here.