EUR/JPY Could Extend Rally As German-Japan Yield Spread Widens

Much has been said about the US 10y yields breaking out and a lot of focus will be on that ahead of the FOMC decision tonight. But It is not just the US where bond prices are slumping. Yields are rising across the major developed economies as this chart shows:

(Click on image to enlarge)

Bond yields

Source: TradingCandles.com and TradingView.com

Today, German 10y yields are also breaking out of the triangle:

(Click on image to enlarge)

German 10 year bond yield

Source: TradingCandles.com and TradingView.com

This is causing the German-Japan 10-year yield spread to widen:

(Click on image to enlarge)

German-Japan yields

Source: TradingCandles.com and TradingView.com

Given the rising German yields and the widening of the German-Japan yield spread, the EUR/JPY should be able to continue higher from the support area shown on the chart:

(Click on image to enlarge)

EUR/JPY daily

Source: TradingCandles.com and TradingView.com

We have had great success with the EUR/JPY for the private group in the past, for example, THIS one:

(Click on image to enlarge)

EUR/JPY before and after

Source: TradingCandles.com and TradingView.com

This was an even better trade on EUR/JPY I provided for the private group in February:

Source: TradingCandles.com and TradingView.com

Let’s hope the good run of form continues for the EUR/JPY and judging by the price action on the yield charts that’s how it is looking like at the moment.

Disclaimer: Trading leveraged products such as FX, CFDs and Spread Bets carry a high level of risk which means you could lose your capital and is therefore not suitable for all investors. All of ...

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