US Treasury notes and bonds turned bearish, yesterday, after the FOMC statement, which was just a trigger for a reversal that has been expected. Notice that from September's low, the rally in five-year notes can be followed in five waves with a wedge at the top of the current rally, which is a reversal sign.
The Next Few Days
Elliott Wave traders will also know that after every five waves, a correction follows back to the area of the former wave 4). If we are correct, US bonds and notes will move lower in the next few days. The question is, how will it impact the FX market?
We see a positive correlation between the EUR and US notes. If the US notes fall, the EUR/USD will probably follow. At the same time, we can see a negative correlation between US notes and USD/JPY -- that’s because of rising US yields.
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Watch T-Bills For Near-Term FX Guidance
Published 10/31/2013, 11:33 AM
Updated 07/09/2023, 06:31 AM
Watch T-Bills For Near-Term FX Guidance
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