EUR/USD: Sell on Rallies Still Favoured Unless a Turkish U-Turn

From globalprime.com.au

First off, as a reminder, from a 3d return perspective on a 3m correlation, the Euro/US Dollar exchange rate continues to be strongly correlated to the differential in yield spreads between Germany and the US, less so against the Italian bond yields, which nonetheless remains a source of concern for investors, but most importantly, the correlation with the falling Turkish Lira is the highest we’ve seen on record, which substantiates the notion of monitoring these assets for potential diverging clues. The chart below illustrates the described correlations: Drilling down into the H4 chart, there has been a ... (full story)