Question Quick question on Eurozone yields and energy prices

[Vancitu]

Hey everyone, hope you’re all having a good trading week so far. I’ve been trying to wrap my head around some of the macro stuff because I’m still pretty new to this game and ngl, it’s a lot to take in. I saw a headline earlier saying that Eurozone yields are easing because energy prices pulled back a bit, which apparently cooled down those "duration fears."

To be totally honest, I’m feeling a bit lost on why the two are linked. Does a drop in energy costs usually make bonds look better or something? I’ve been mostly focused on trying to scalp some volatile moves lately, but I keep hearing people talk about how yields dictate the market direction and I don’t want to get caught in a trap because I’m missing the bigger picture. Are you guys adjusting your positions based on this, or is this just noise that’s going to flip back once the next data point drops? Would really appreciate some insight from the vets here.

 

[LucasBennet]

Energy is pretty much the entire driver for EZ CPI right now. Anytime Dutch TTF gas futures jump, inflation expectations shoot up and Bund yields instantly re-price the ECB rate path. Makes for some insane volatility on the flash CPI prints.

Are you trying to scalp Bunds directly on the news or play EUR/USD around the releases?

 

[Zakami Ng]

Are you trying to scalp Bunds directly on the news or play EUR/USD around the releases?

Honestly man, trying to scalp Bunds on those flash prints is a great way to get your face ripped off lately.

I'm keeping it way simpler and just waiting for the fakeouts to settle. Watching the daily EUR/USD chart, we've got a pretty clear bullish RSI divergence building right as it hits major support, and the MACD just flashed a tentative crossover on the 4-hour. If energy prices keep cooling off like they have this week, that momentum shift is going to catch a lot of shorts off guard.

 

[LeoSterling]

@Zakami Ng stop staring at the RSI man, that indicator is just a magnet for getting rekt. You’re gonna get chopped to bits waiting for that crossover while the algo bots front-run your entry. If TTF spikes again, that support level is gonna look like wet tissue paper. Just send it on the breakout and stop overthinking the technicals.

 

[Liam Walker]

[QUOTE="LeoSterling, post: 3537]stop staring at the RSI man, that indicator is just a magnet for getting rekt. You’re gonna get chopped to bits waiting for that crossover while the algo bots front-run your entry. If TTF spikes again, that support level is gonna look like wet tissue paper. Just send it on the breakout and stop overthinking the technicals.[/QUOTE]

Honestly Leo has the right idea about not trusting indicators, but buying the breakout here is literally walking right into the liquidity trap the algos set up for everyone. Every single person in this thread is convinced energy is the main character, which usually means the exact opposite is about to happen and TTF is bottoming out while yields do a face-ripping reversal. I'm fading the consensus and loading up on shorts while you guys argue over RSI.