There are many times that traders want to trade more financial instruments in their electronic trading environment. Some of the brokers give the opportunity of trading fixed income instruments, some don’t. But if you don’t have original instrument, let say 10Yr T-Notes in platform, and you want to earn on their recent 4 basis points fall, and possible downside extension, you can still trade it by shorting EUR/USD. The correlation between the two is positive and as addition they both reversed form the medium term uptrend. EUR/USD is in long term downtrend continuation with a multi month wedge break below 1.0630 and 10Yr T-Notes reversed the trend with a break of 100 SMA on weekly chart (red line) 127, as can be seen on charts below.
Now to get advantage of US 10Yr T-Notes extended fall, if you don’t have the instrument in the platform, choose the entry point for EUR/USD and you will replicate the 10Yr T-Notes trade.
Happy trading !
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