The US real benchmark yield is normalising from an overbought condition. This is rippling through the market, with FXCM's USDOLLAR also pulling back from an overbought condition. The corollary to this is that the EURUSD is also reacting.
The EURUSD daily chart (left) shows its RSI normalising from an oversold condition (green rectangle). The EURUSD has jumped more than 100 pips over the last two days, just as the real benchmark yield was pulling back from its overbought condition. Nevertheless, the EURUSD is still trading in its bearish channel between the lower blue and red bands.
The hourly chart (right) shows bullish developments. The green 5-hour EMA is above the orange 10-hour EMA in a bullish formation. Moreover, the stochastic is positioned above 80 (red rectangle). The longer the stochastic can maintain this position, the higher the chances that the underlying hourly momentum is likely to remain positive.
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.