Asian Sovereigns were the first of the big players to start buying this pair and every macro fund in the world will be watching anxiously and hoping to get on a big bull run if/when it happens. Japanese corporates will remain big net sellers but if US yields suddenly start heading higher, then bullish momentum could easily take us back above 85.00 and beyond.
The big level to watch on US 10-year yields is 2.2% and a break above there could be the catalyst for the next bull leg. In the meantime, 79.50/81.50 look like the outside edges and trading these with a bullish bias looks like the way to go. It’s also interesting to note that recent volatility has meant that many of the really big trading accounts, who had been avoiding this pair, have now started trading it again.
