US Yields from a "Birds-Eye-View"

The risk correction is causing investors to shift exposure away from risky unhedged US holdings… USDJPY looks set to continue the decline towards 106 as Japanese investors shift from US exposure (remember this is largely unhedged via a flat yield curve) to Europe (mostly hedged via a steep yield curve). Japanese pension funds I talk to are especially trying to minimise currency exposure by finding alternative solutions for currency hedged investment opportunities as the cost of hedging rises.

Is is very possible the market has now come "close enough" to the target area previously discussed as the target for wave iii of v. This area is confluent with the 200MA among other things. Bottom line, it will take a while to break lower if at all. It is time to start paying attention as we are at an important place to watch for any signs of an impulsive rise.

From a strictly wave perspective it is possible to argue the case for the market trading within an incomplete ABC from the October 2018 highs. That said it is very difficult to trade the downside here as it feels at risk of chasing the moving train until we get a clean break through the 2.354 lows. To put simply, watch for signs of support holding and an impulsive rise to further validate the support levels. Any break lower will open up the downside risk for 2.08%.

Good luck and thanks for keeping the feedback coming.

Trade chiuso: obiettivo raggiunto:

Targets hit !!!