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US Bonds were trading lower in the last two sessions after the minutes of the Federal Reserve showed that most policymakers still favored a tapering program this year. But, the sell-off in bonds came on news that QE could end in mid-2014. The USD was firstly down on the news, but then it recovered during the Asian trading hours. However, EURUSD is again finding some bid, so it lacks a real direction at the moment. Meanwhile the S&P Futures are rallying.

I am looking at the 10-year US notes where I suspect that prices are moving lower into wave B that is part of a larger three wave rally on a daily chart shown below.

Wave B could reach levels around 124-124.50 so there is room for more weakness. If weakness resumes, then US yields will rally and support USDJPY.

10 -year US notes daily

10year US treasury notes technical Elliott Wave Chart for forex trading

On USDJPY I can see some reversal to the upside but we still need to wait more, especially if we also consider that on 4h chart the price is now testing the upper trend line of a downward channel. We definitely want to see a breakout here to confirm bullish waves, back towards the 100 handle.

USDJPY 4h

usdjpy_oct_10_2013_4h Elliott Wave Technical Forex Analysis for currency trading