when you are looking at any index, and try to trade its components, there is relative under performance and relative outperformance of index components, when that index starts trending for example, usdindex starts falling, eurusd starts rising ,so does gbpusd now as eurusd has got sufficient weightage in usdindex, so it nearly moves exactly same as usdindex, but gbpusd will show relative outperformance and underperformance in context to moves of eurusd, providing good opportunities to trade gbpusd out of eurusd and gbpusd , eurusd is the leader between the two, so if gbpusd has moved up aheda of eurusd then it will come back, now if usdindex is falling , eurusd will move up, and at times gbpusd moves up with a lag ( sometimes as big as 6-12 hours, yes that big) so now looking at eurusd up move there will be relative underperformance of gbpusd(it will be consolidating), and now you know that gbpusd has to catch up with eurusd, so that provides good trading opportunities, now the question is when will gbpusd start catching up with eurusd== and the answer is when eurusd breaches the previous high (usdindex breaches previous low)that is when gbpusd will move up (it will come out from consolidation)to catch up and abolish its relative underperformance the similar thing happens with usdjpy, when usdindex is falling at times usdjpy will not fall but instead will start consolidating and will fall less relative to fall of usdindex, then when usdindex makes new low after breaching previous low, usdjpy will move down sharply to catch up with this fall ( this happens with big lag at times too) so basically to say when index starts trending up or down, it components trends in that direction but some components will move with lag and will provide good trading low risk opportunities, remember there is always a relay race going on among components of index, components move one by one according to weightage of that component to keep the trend of index intact, ==================================================================================== this is true for all indexes, like stock index also, when s&p 500 starts trending up, its sectors moves one by one, one sector moves, then it consolidates, and then other sector moves up and pushes s&p500 further up even among sectors, individual stocks moves one by one and keep this relay race going ========================================================================================== usdindex, us 30 years bond and so is moves in s&p 500 are linked to interest rates set by fed policy 30 years bond is the most stable and related well to S&p500, when bond is falling s&p 500 moves up and same reverse relation exist on the other side also, so when s&p 500 is moving up, then 30 years bonds are going down, now looking at weekly and monthly timeframes in bond chart, there are moving averages on bond chart when prices takes support on that, that is when you can expect top on s&p500 to come, similarly when s&p 500 is falling and takes support at it moving averages on long term chart that is when bond will likely to top out. so reading chart of both simultaneously is critical. real bull market in s&p 500 and so global stock markets starts when usdindex starts falling with low interest rates in place across the bond markets, means it will be strengthening of emerging market currency simultaneously and so rally in em stock markets will come and oil will also rally up. bull markets ends when interest rates , oil overheats and so does inflation , -------------------------------------------------------------------------------------------------------- when there is crash in s&p 500 there will be buying in bonds(30 years bond will start rising and yields will fall)( risk off) , and so will be rise in usdindex as dollar will be in demand to buy us bonds. as usdindex starts rising there is also fall of emerging market currencies and so will be the fall in emerging market stock markets along with fall in us markets so tracking us 30 years bonds, usdindex and s&p500 togehter will give idea of when market is likely to turn, that is how currency markets , bond markets and stock markets are linked, that is the reason you will see moves coming in when major currency markets opens and simultaneously bond markets starts trading so in that context, one move comes when german bond market starts trading along with eurusd starts trading in london session on interbank platform , other move starts when us market bond and usd starts trading on us interbank platform along with beginning of us market trading session when H4 candle close is approaching. last significant move that sets the trend comes at close of us close, and this prices is set by professional traders and mostly in last closing hour of us markets. that sets the closing price of daily candle close. if there is already established trend in gbpusd going on then gbpusd will start moving right from frankfurt open or else it will wait till full swing trading starts of eurusd on london interbank platform in london session when critical timing of H4 candle close overlaps, and then gbpusd will take clue from moves of eurusd and usdindex. ------------------------------------------------------------------------------------------------------------------------------------------