News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bearish
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • 🇦🇺 Inflation Rate YoY (Q3) Actual: 0.7% Expected: 0.7% Previous: -0.3% https://www.dailyfx.com/economic-calendar#2020-10-28
  • 🇦🇺 Inflation Rate QoQ (Q3) Actual: 1.6% Expected: 1.5% Previous: -1.9% https://www.dailyfx.com/economic-calendar#2020-10-28
  • What is the US Dollar outlook based on retail positioning ahead of the November 3rd presidential election? $EURUSD may fall as $AUDUSD rises. Which way could $USDCAD capitulate ahead? - https://www.dailyfx.com/forex/technical/article/special_report/2020/10/28/US-Dollar-Sentiment-Outlook-EURUSD-AUDUSD-USDJPY-Retail-Positioning.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/nrELoX9dli
  • #ASX200 bursting higher after falling back to the H&S neckline and 50% Fib (6013.46) A push back towards the 6,100 mark could be on the cards if resistance at the 38.2% Fib (6069.65) gives way. #XJO https://t.co/zdOqIjcbbE
  • The AUD/USD exchange rate appears to be struggling to overcome key chart resistance ahead of Q3 inflation data as the RBA hints at further easing. Get your $AUDUSD market update from @DanielGMoss here:https://t.co/TJSXzD5qRB https://t.co/idsNEKpiym
  • Heads Up:🇦🇺 Inflation Rate QoQ (Q3) due at 00:30 GMT (15min) Expected: 1.5% Previous: -1.9% https://www.dailyfx.com/economic-calendar#2020-10-28
  • Heads Up:🇦🇺 Inflation Rate YoY (Q3) due at 00:30 GMT (15min) Expected: 0.7% Previous: -0.3% https://www.dailyfx.com/economic-calendar#2020-10-28
  • Double top looking more plausible in the #SPX500, hinting a significant risk-off move is brewing across the broader markets. Confirmation on a daily close below 3198-3231 area, it seems #SP500 #stocks #technicalanalysis https://t.co/bhHZtJyoMN
  • Heads Up:🇨🇳 Communist Party Annual Meeting due at 00:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-10-28
  • The British Pound, Australian Dollar and US Dollar may all experienced heightened periods of volatility as geopolitical risks in North America, Asia and Europe rattle global financial markets. Get your $GBPUSD market update from @ZabelinDimitri here:https://t.co/0EFToM5Y8I https://t.co/JcOmMXJs1l
US Dollar Down, Not Dead - How Yields May Buoy the Buck

US Dollar Down, Not Dead - How Yields May Buoy the Buck

2014-06-20 11:20:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Talking Points:

- US Dollar down, but not dead as EURUSD, USDJPY reverse.

- Long bond yields may be bottoming, which is USD-positive.

- June seasonality still working against the buck, however.

The Federal Reserve may have painted a slightly optimistic picture with its updated June economic forecasts, but it was Fed Chair Janet Yellen’s press conference that really stuck it to the buck on Wednesday. However, after the initial euphoria of ‘lower rates forever’ passed, it became clear that market participants weren’t necessarily convinced that yields would remain low – at least that’s what the bond market may be signaling.

With the hunt for yield still well-on – look no further than Italian and Spanish yields sitting at or near all-time lows, with the Spanish 10YY fetching a lower rate than the US 10YY in recent weeks – it’s inherently important for any major currency backed by a central bank in a QE regime to have higher yields to maintain appeal, on a relative basis.

Forex Technical Analysis: TLT (20+ Yr Treasury Bond ETF) Chart (Daily)

US Dollar Down, Not Dead - How Yields May Buoy the Buck

Our attention is thus drawn to the long-end of the US yield curve, which TLT serves as a proxy for (20+ Yr Treasury Bond ETF). As TLT tracks the price of bonds, when TLT rises, bond prices rise, and yields fall. Now, as the chart above shows, TLT may be working on a head & shoulders topping pattern, which would call for a rise in long-term yields. If this develops, the US Dollar may be better supported in the coming days.

Forex Technical Analysis: USDJPY Chart (Daily)

US Dollar Down, Not Dead - How Yields May Buoy the Buck

Should US yields rally, it would come at a very opportune time for USDJPY in particular. In the accompanying video (scroll back to the top of the article), we go into the technical aspects of how a US Dollar turnaround could take place, with focus on EURUSD and USDJPY.

Have a bullish (or bearish) bias on the US Dollar, but don’t know which pair to use? Use a US Dollar currency basket.

Read more: US Dollar Bulls Gored by Dovish Yellen, EUR/USD Surges

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES