Normally the dollar index follows the US 10 year yield pretty closely. Since December there have been a massive divergence.
Which trend is correct? $ to low or the yields to high?
My view based on how oversold the dollar is and how it has been hammered over the past year but even more so over the past 3 months the $ is very close to turning around. This will correlate with my views on EURUSD & GBPUSD ( see my postings on these pairs)
If the yields are overstated it could turn around and the $ could continue its path down but this is not my preferred view
Lets see how this one pans out. Something has gotta give in the next few weeks and Q1 set to be key in giving direction for the rest of 2018
It's possible to see a convergence next weeks? And if not, if it continues like this, could we expect a bearish trend from now on?
It's complicated to say that a convergence will reverse the market again, because a weak dollar is good for US economy but high bond yields scaries the markets. To me it's hard t predict something right now but i prefer to see dollar on its previous levels, more close to Euro. If it continues like this, European Union will suffer too. Even GE10Y is rising...
To be honest, i hate look to the market without knowing what to do... sell, or buy.
Eddied01
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@OCI, don't Feel alone! I am also not convinced either way. At this stage it is decision time for the big boys and even they are split 50/50. Best is to Tread carefully over the next few weeks. It might even take the whole of Q1.
Gun to my head I would recon the dollar is about to turn up soon. see posting below which could back this up
It's complicated to say that a convergence will reverse the market again, because a weak dollar is good for US economy but high bond yields scaries the markets. To me it's hard t predict something right now but i prefer to see dollar on its previous levels, more close to Euro. If it continues like this, European Union will suffer too. Even GE10Y is rising...
To be honest, i hate look to the market without knowing what to do... sell, or buy.