U.S. long-dated Treasury yields rose | 21 October 2021

21 October 2021, GBP/USD

GBPUSD trading plan:

U.S. long-dated Treasury yields rose after a weak auction of 20-year bonds, with the yield curve steepening for a second day and investors paring back aggressive monetary tightening bets from the Federal Reserve. Prior to the curve steepening this week, the yield curve had flattened the last few sessions on expectations that the Fed will raise interest rates earlier than expected, pushing short-dated yields higher. Fed Governor Christopher saying the Fed may have to adopt "a more aggressive policy response" if high inflation continues through the end of the year. Futures on the U.S. federal funds rate, which track short-term interest rate expectations, continued to price in a rate increase next year. This is a positive signal for the dollar.

Investment idea: sell 1.3860 and take profit 1.3815.

David Johnson
Analyst of «FreshForex» company
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