The inversion | 10 8月 2023

10 8月 2023, EUR/USD

The inversion

EURUSD trading plan:

The 10-year note U.S. Treasury yields is still well below the 2-year equivalent, usually a sign of impending recession at a time when most of the talk in markets is about the Fed avoiding one. A hotter-than-expected July U.S. consumer price index inflation reading, due, could raise expectations for more hawkish Fed policy and drive bond yields up further. Interest rate futures are now pricing in the first Fed rate cut in May 2024 instead of March a few weeks back. Central banks' rate hikes have pushed up yields on short-dated bonds, which are highly sensitive to short-term borrowing costs. Longer-dated yields have risen less sharply, because investors expect rates to fall at some point in the future.

Investment idea: sell 1.1009 and take profit 1.0944.

David Johnson
Analyst of «FreshForex» company
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