A growing yield spread between short-term and long-term US Treasury bonds will have a positive influence on the capitalization of the US stock market, which in turn will lead to an increase in the quotes of this currency pair, inasmuch as it is historically correlated with the S&P500 index.

The growing yield spread indicates the expectation of a high rate of US GDP growth. In turn, GDP growth leads to an increase in the capitalization of the stock market. In the American stock market, the “bubble” continues to inflate, which will surely burst, but in my opinion, this will happen next year, when the US Federal Reserve System stops the QE program. Now the Fed has just begun to cut stimulus and usually the market ignores this process.

Trading recommendation: buy 113.88/113.56 and take profit 114.40.