Higher Real Yields Impacting on SPX500
Real Yields
Source: www.tradingview.com
The US 10-year real yield is moving higher. Its green 5-day EMA is pulling away from its orange 10-day EMA (black circle) and the RSI is moving higher and away from 50 (green rectangle). As yields appreciate, they tend to act as a headwind to the risk side of the market.
SPX500 Hourly Analysis
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1. As the daily real yield pushes higher the SPX500 is under pressure on its hourly timeframe.
2. Its green 5-hour EMA is below its orange 10-hour EMA (top black ellipse), putting the EMAs into a bearish formation.
3. The stochastic has crossed down (bottom black ellipse) and is heading towards 20 and below (blue arrow).
4. If the EMAs develop angle and separation to the downside and the stochastic drops below 20 and holds (blue arrow), and underlying bearish momentum will be driving the SPX500.
5. This will keep the index under pressure.
Russell Shor
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.
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