last post I mentioned in relation to Fed Funds, Forward Yields for the 6 month US yield at 1.01 and 1.09 for the 90 day. The rate to watch for a rate hike by Yellen is the 90 day due to the crossover of the 90 day above the 6 month. More important to the crossover and the 90 day is if Forward Yields predict 1.09 in 90 days then Breakeven rates are much higher than 1.09 so the 90 day rate has room to run higher. Breakeven Rates must come in at something like 2.09 or extremely close. Th point is Yellen has room to raise a series of Fed Fund Hikes by current yield standards. Yet if Inflation is the guide, 5 year Tips 0.21 and 5 year US yields 0.31 trades at 0.1 to match exactly the current Inflation rate at 0.1.
GBP/USD. Bottom 1.5392. Note current range break below 1.5389. Range break above 1.5548. Overbought Sell point 1.5500 – 1.5506, target back to bottom 1.5392. Long to 1.5500 – 1.5506, then reverse short to 1.5392. price must clear the cluster between 1.5474 – 1.5478. Points on the way up, 1.5468, 1.5474, 1.5475, 1.5476, 1.5478, 1.5480, 1.5487, 1.5500, 1.5506.
EUR pairs next,
brian Twomey, Inside the Currency Market, btwomey.com