Bill Ackman Tweet Drives Yield and USDOLLAR Lower

  • USDOLLAR
    (${instrument.percentChange}%)


Source: www.tradingview.com

After briefly moving above 5% the US 10-year yield has retreated and is currently yielding 4.81%. Technically, there is a divergence between the 10-year yield and its RSI. This suggests that momentum may be slowing and that the yield correction may extend.

There was a bounce in the bond market yesterday which contributed to the drop in yield and one of the catalysts was a tweet by Bill Ackman, the billionaire head of Pershing Square Capital Management, saying that "There is too much risk in the world to remain short bonds at current long-term rates" and that "We covered our bond short."

Yields have been a key driver of the dollar. As such, the retreat in yields saw a retreat in FXCM's USDOLLAR basket:

Why Trade with FXCM

Commission free with fast, efficient execution.

FXCM's USDOLLAR basket has dropped into its bearish channel between the lower blue and red bands. Moreover, its daily RSI has dipped below 50, which is the bearish side of the indicator. The longer the RSI maintains below 50 (green rectangle), the more momentum pressure will be applied to the greenback.

If the bond market continues to bounce, and the yield continues to retrace, the USDOLLAR will continue to remain under pressure. This scenario becomes more likely if weaker US data is printed.

Russell Shor

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.

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}
Disclosure

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.