The inversion | 14 Noviembre 2022

14 Noviembre 2022, EUR/USD

The inversion

EURUSD trading plan:

The euro zone government bond market delivered the clearest sign yet that Germany, the region's largest economy, could be on the verge of a recession, as short-dated yields rose sharply. In Europe showed harmonised inflation in Germany, the euro zone's biggest economy, rose at a rate of 11.6% in October, its highest since reunification in 1990, due in large part to spiralling food and energy costs. Separate reports this week have forecast a steep drop in consumer spending. Yields on the benchmark 10-year Bund rose by 15 basis points, their largest one-day rise since late September, to trade around 2.153%. Those on the two-year Schatz rose as much as 17 bps to a high of 2.15%, briefly pushing above those for 10-year debt. This inversion can often herald the onset of a recession.

Investment idea: sell 1.0380 and take profit 1.0300.

David Johnson
Analyst of «FreshForex» company
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