FOREX Inter-Market Indicators

Hello everyone,

There are some useful Sentiment indicators based on FX Options trading activity and US Yeild Curve analysis.

Just to start a discussion...

As of 07/25/08, US Options Markets Open Interest Ratio was:

EUR/USD 1.13 Neutral
GBP/USD 1.85 Bearish
USD/CHF 3.59 Bearish
USD/JPY 0.83 Bullish
AUD/USD 0.35 Bullish

US Yield Curve is shifting upward, my reading for 10Yr Yield / 2Yr Yield Ratio is -1.57% at a close on 07/25/08 - Bullish for US Dollar..

Let me know if this is an interesting piece of info. I have more stuff on Oil, Gold, Stocks, Bonds influence on Forex Markets. Inter-Market Analysis is pretty powerful addition to the Trend and Momentum analysis...Opinions welcome!

This type of sentiment analysis really shines when one wants to know when when bulls or bears are being excessive.. "bullish, bearish" etc is probably not so useful for most people. But if you can define "extremely bullish" with standard deviations from the mean value, extremes in the market can be confirmed quite well if on the following day of the extreme, the value changes dramatically.. Easily charted and studied in Excel.

I use this on the broad market (equities) coupled with similar analysis of the VIX for a clearer picture.

I agree. Yesterday was a good example:

EUR/USD PUT/CALL was 11.7 - Overly Bearish

while AUD/USD pair produced 1.39 - Bearish ratio for the first time in a long time. Options traders are getting bearish on Ausse!

My US Yield Curve Sentiment was +2.73% - Bearish on USD!