Since Friday (black dashed vertical), the US 10-year real rate (top candlestick chart) has declined. At the same time, the US30 (bottom candlestick chart) has appreciated. The two have a correlation coefficient of -65%, reinforcing the inverse relationship.
We have added a 5- and 10-EMA to both candlesticks charts. The real rate's EMAs are developing angle and separation to the downside. At the same time, the US30's EMAs have crossed bullishly. These suggest a risk-on sentiment as we move towards the cash open. If the EMA patterns hold, the US30 will likely benefit from declining rates during the session.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.