This chart has helped me earlier predict the breakout above the long term resistance and sideways range. See related link below.
This is one of the key chart to watch if you are trading the EURUSD 0.05% pair. The inverse relation between:
-U.S. 10 year yield Subtracted by German 10 year yield (Top chart)
-EURUSD (Bottom Chart)
A simple chart that illustrates the inverse correlation between the 10yr us yield and german yield differentials and the EURUSD. if you follow the chart starting from the left, each upside directional move in the differential is accompanied with depreciation in the EURUSD . On the other hand, each decline in the differential is accompanied with a rise in the EURUSD .
The differential chart has recently broken the long term rising trend line , which was preceded by an earlier breakout below the key 1.96 level. A series of lower highs and lower lows has already established.
It seems that the differential are telling us that a breakout of the long term sideways range in the EURUSD is likely to continue. Recently the ratio of the differentials has been trading sideways with a slight upside bias, hence the slow down in EURUSD bullish trend. But the ratio has reached first resistance at 1.843 which is first potential zone to look for the ratio to start declining again. if not, and the ratio extends above that resistance, it could extend to the major next resistance at 1.959 the second potential reversal zone. If the second case materializes, this would be accompanied by the EURUSD retesting the long term broken resistance-turned-support around 1.1700 before resuming the uptrend.
Resumption of the downside in the ratio will probably be resumption of the upside in the EURUSD.
Best
Technician
This is one of the key chart to watch if you are trading the EURUSD 0.05% pair. The inverse relation between:
-U.S. 10 year yield Subtracted by German 10 year yield (Top chart)
-EURUSD (Bottom Chart)
A simple chart that illustrates the inverse correlation between the 10yr us yield and german yield differentials and the EURUSD. if you follow the chart starting from the left, each upside directional move in the differential is accompanied with depreciation in the EURUSD . On the other hand, each decline in the differential is accompanied with a rise in the EURUSD .
The differential chart has recently broken the long term rising trend line , which was preceded by an earlier breakout below the key 1.96 level. A series of lower highs and lower lows has already established.
It seems that the differential are telling us that a breakout of the long term sideways range in the EURUSD is likely to continue. Recently the ratio of the differentials has been trading sideways with a slight upside bias, hence the slow down in EURUSD bullish trend. But the ratio has reached first resistance at 1.843 which is first potential zone to look for the ratio to start declining again. if not, and the ratio extends above that resistance, it could extend to the major next resistance at 1.959 the second potential reversal zone. If the second case materializes, this would be accompanied by the EURUSD retesting the long term broken resistance-turned-support around 1.1700 before resuming the uptrend.
Resumption of the downside in the ratio will probably be resumption of the upside in the EURUSD.
Best
Technician
