This might contradict our price action analysis but this is something that needs to be taken into consideration.
As many know, German 5 yrs bond yields - US 5 yrs bond yields differential is regarded by many intermarket analysts to be leading indicator for EURUSD. EURUSD is supoosed to follow this differential and some traders make a strategy out of this.
And what we have been observing since 2018 was a significant divergence going on. The differential is the way above its 200 ema.
However we ought to remember also that DE05y unlike US05Y are in the negative zone now (for a long time already), this might be the reason of the current divergence.
D05y bullish move into 0 or above will surely drag the eurusd up if the differenatial keeps trending up.
This subject of intermarket analysis is not my expertise, though. Just sharing my observations.
The suspicious is the fact that on EURUSD monthly pre-breakdown candle is missing DM 3 breakdown qualifier (pre-breakout candle shadow is the way too long).
As many know, German 5 yrs bond yields - US 5 yrs bond yields differential is regarded by many intermarket analysts to be leading indicator for EURUSD. EURUSD is supoosed to follow this differential and some traders make a strategy out of this.
And what we have been observing since 2018 was a significant divergence going on. The differential is the way above its 200 ema.
However we ought to remember also that DE05y unlike US05Y are in the negative zone now (for a long time already), this might be the reason of the current divergence.
D05y bullish move into 0 or above will surely drag the eurusd up if the differenatial keeps trending up.
This subject of intermarket analysis is not my expertise, though. Just sharing my observations.
The suspicious is the fact that on EURUSD monthly pre-breakdown candle is missing DM 3 breakdown qualifier (pre-breakout candle shadow is the way too long).