Real rate correction ripples through to USDOLLAR.
Source: www.tradingview.com
The real rate (top candlestick chart) has declined since Friday, 22 Oct. This yield has a causal relationship with the greenback, and, as such, FXCM's USDOLLAR basket has followed it downwards. The H4 correlation coefficient between the two is a strong 78%. I.e. any further pressure on the real yield will likely ripple through to the dollar.
Source: www.tradingview.com
The real rate remains overbought on the longer-term weekly chart (green rectangle). This condition will not be able to hold indefinitely, and normalisation is needed. The current correction on the H4 chart may be a part of this process. If so, it will continue until the weekly RSI reverts to typical levels. I.e. the USDOLLAR is still susceptible to further weakness until the real yield has shed its excess and technically corrected.
Russell Shor
Senior Market Strategist
Russell Shor is a Senior Market Strategist at FXCM, having been promoted to the role in 2025 in recognition of his depth of insight and consistent delivery of high-impact market analysis. He originally joined FXCM in October 2017 as a Senior Market Specialist.
Russell holds an Honours Degree in Economics from the University of South Africa, is a certified FMVA®, and a full member of the Society of Technical Analysts (UK). With over 20 years of experience in financial markets, his work is renowned for its clarity, precision, and strategic value across asset classes.
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