More EUR/USD...Part 1

It is looking more and more like the Euro/USD is going to go up significantly over the next few trading sessions. One of the reasons I covered my (losing) short positions was because of the 10 year note yields, which rose to 3.38% last week. That's the highest it's been since November...even though the 3.38 was the top of the Bollinger Band (3 mo. chart) and we may see that correct a little first.

Here is the yearly chart...and it looks very much like an uptrend in the yield to me.

Fed could get very aggressive and continue bond purchases because the sole purpose for doing all this buying in the first place has been to keep interest rates down. (If you are a newer trader, price and yield work opposite.)

So, a rise in Euro/US is related to how much the fed increases their balance sheet (quantitative easing.) When they expand their balance sheet, the Dollar weakens.

There are three or four other reasons, which I will talk about in the next few posts.