The 10 year bond is in rally mode. And although up against some key resistance, the flag pattern points much higher.
As a currency trader this matters to me since I am short USD/JPY and we are just 20 pips from critical support.
As you can see in this chart, if bonds rally and yields fall, the USD/JPY (yellow line) is likely to trade south as well. There is a very strong iverse relationship with the two instruments.
Blake Morrow
Chief Currency Strategist
Disclaimer: I have been short USD/JPY for many weeks and may add to my existing position
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