By Back Bay FX – We are nearing the end of a very volatile week in the currency markets. Trying to find a big figure or two has been nearly impossible except for this past Monday.
We are sticking with our theory of stronger USD for the coming weeks based on the US Fed’s statement this past Wednesday. (See our previous postings at www.backbayfx.com/blog.php) We are concerned that the price action of EUR/USD in the last 18 hours has not showed the follow through of the initial USD strength, but we keep in mind that our expectations of stronger USD is a longer term plan…..not an intraday trade.
The US Treasury’s 10 year note has continued it’s drop in yield and has hit the 3.50% level this morning; Down from 4.00% less than three weeks ago. The moves in the US 10 year note are some of the most volatile moves we have seen in the last 12 years since we started in the FX business. the move in the 10 year has been sharp, but we feel there is still some room for rates to drop.
Finally, our technical analysis of EUR/JPY shows a trend that is still moving higher and has bounced off the support line. See chart below. Our fundamental view differs from our technical view on this pair, so we will not aggressively trade the pair.
Stay Nimble!
Stephen Leahy
Back Bay FX Services, LLC
www.backbayfx.com
Thanks to FX Solutions for the below image.
