Yield curve inversion | 02 October 2023

02 October 2023, EUR/USD

Yield curve inversion

EURUSD trading plan:

The Federal Reserve indicated that interest rates will remain higher and it will take longer to bring inflation in line. The yield curve continues to dis-invert with longer maturity securities selling off more than shorter maturity Treasury securities. Bear steepening is far less frequent and usually doesn’t persist long term, so we think ultimately this current move will be short-lived, but as long as the curve remains deeply inverted, upward pressure on long-term yields may remain. This is a positive signal for the dollar.

Investment idea: sell 1.0600 and take profit 1.0535.

David Johnson
Analyst of «FreshForex» company
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