EURUSD bull case by way of $IEI support levelTalking some more about EURUSD and why I think it's about ready to have an about face and go back up, looking once more towards something that represents treasuries with maturities in the range I had shown as being useful for indicating EURUSD relationship moves.
NASDAQ:IEI represents 3 to 7 year maturity treasuries, and with the 5 year being the metric I've been using to get a feel for pending EURUSD moves, this could be useful.
The big thing I picked out is the long term support near enough to $113.50. NASDAQ:IEI has bounced off of that multiple times, dating back to last fall, even (I haven't drawn the lower trend line back that far, but you can see it--just before it broke down below that last fall).
We have descending line tracking the highs, compressing price action into this wedge. I have a feeling the lower support line holds and NASDAQ:IEI trends higher. If the underlying bond is going up in value, the yield comes back down.
With that being said, Euro's 5 year trades pretty similarly to the U.S. overall, but sometimes when you come to a juncture like this, one of them will make a larger % move. If the U.S. yield drops faster than the Euro's, EURUSD goes up. Euro yield is likely to drop in tandem with the U.S., I'm just betting it doesn't make as big of a down move, sending EURUSD up.
