The EUR/USD has probed above the recent 1.3730 -1.4170 range after breaking above trendline resistance. A weekly close above 1.4170 would be a first since September and suggests an end of rangebound trade that has persisted over the past few months. While the 50-day moving average and weekly RSI's are maintained, the immediate target is the 2009 high at 1.4335. The next target comes in near 1.46, close to the spike high in December and a key fibonacci retracement. Meanwhile, a loss of 4-hourly RSI trendline support is required to delay strength and refocus the 1.4140 zone, where the recently broken trendline now resides.
While equities, commodities and foreign currencies continue to surge on improving risk appetite, treasury yields are telling a different story. In general, interest rates tend to turn or reverse ahead of stocks and commodities. After an initial surge, treasury yields retreated quite significantly Monday on the back of diverging 4-hour studies. As bearish divergence is also setting up on 4-hourly charts of various indices and currencies, it is yet to be seen whether they will follow interest rates lower as well.
