Since the week starting Monday, 17 October (black dashed vertical), the US 10-year real rate has been drifting lower (blue arrow top chart). An appreciation in the EURUSD (red arrow bottom chart) accompanies this.
The above chart shows the EURUSD has charted a series of higher troughs followed by higher peaks. Moreover, it's RSI has crossed into the bullish area above 50 (green rectangle). I.e. the EURUSd is trending up.
The median CPI looks to have reached an apex, and the Fed has suggested a 50 bps hike for its next move, i.e. a rate hike but at a decreasing rate. If this entrenches, the dollar is likely to soften, with EURUSD being a beneficiary.
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.