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It May Not Be As Bad As It Looks
The forex is buzzing with comments about the change in the risk environment. The JPY is strengthening against just about everything, stocks are down again following Friday's rout and the USD retraced last weeks losses against the EUR and GBP. However, if the risk environment was really changing, I would expect bond prices to be rising and yields to be falling. So far, this session, the bond yields would dispute this situation.
The 10-year yield is rising, which means bonds are falling. This is not only contrary to the assumed risk bias out there but is against the movement in equities as well. This contrarian movement may indicate that the big correction on the USD is over temporarily. It is also interesting that several of the major pairs have paused at relevant support/resistance levels. I certainly don't think that more adjustments are impossible but it does not appear that we are due for another correction like we saw in late July and August.
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TNX
Source: MetaStock Pro FX
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