I've been thinking all day how I can describe to you the pain I felt when I woke up this morning and saw Sterling 180 points lower, with our offers to get short left intact. And after thinking about it all day I have to be honest with you, I've come up with nothing. In fact, it's too painful to think about. So rather than dwell on our nearly-missed fortunes, we came in this morning to find a very bid 10-year rate that gapped higher on the open. And lately when the US yields are on the move to the topside, US equities and the carry crosses, particularly EUR/YEN, are scared straight into a direct correlation. I put together a 1-minute DJIA, EUR/YEN overlay chart to show the relationship. I did three short-term trades in EUR/YEN using the Dow as a proxy with moderate profits in each. All in all it was a good week on the trade desk, and looking forward to what the markets have in store for us next week.



Todd Gordon is a Technical Currency Strategist and Fund Trader with GAIN Capital Group.

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