Overlaying the Spanish 10-year yield on the EUR/USD spot chart shows a pretty high correlation, and one that bears close watching at these market levels.
Spanish benchmark 10-year has been range-trading in recent weeks between the mid-5.60% yields and just below 6% as EUR/USD has spent most of the last few months between 1.2650 and 1.3150.
For near-term clues in EUR/USD, keep an eye on the Spanish 10-year. It yields 5.65% not. If we are able to break lower, look for EUR/USD to take a strong run at the 1.3000 level.
