A Deutschemark yield map with dual-average and relative-strength timing

A rate map before a currency timing rule

Intermarket analysis is defined as comparing pricing elements of two related or inversely related markets. In this archive workflow that comparison is then combined with ordinary technical tools to study the Deutschemark and other currencies.

The mark is treated as closely linked to the dollar, and the dollar as closely linked to interest-rate behavior. Monitoring rates is therefore presented as a way to anticipate both currency trends.

The yield-currency inverse

The mark is plotted per 1,000 U.S. dollars against the U.S. long-term bond yield. That mark-per-thousand-dollars quote expresses the mark against a fixed dollar amount so it can be drawn in the same direction as U.S. bond yields.

The resulting yield-currency inverse is the described alignment in which a rise in U.S. long-term yields is drawn to coincide with a rise in the mark-per-dollar series. A yield rise then lines up with a rise in that series, making the chart inverse to the mark's own value.

How the rate link is described

Relatively high rates are described as attracting capital. Falling U.S. rates together with rising German rates are described as lowering the dollar and lifting the mark.

The 1991 support line and the July break

From March to July 1991 the mark-per-dollar series is described as tracking a sloping support line. After both that series and the long-term yield peaked in July, a break below the line is treated as a reversal that ended the dollar's uptrend and started a mark advance.

Dual moving-average confirmation

Because yields are framed as products of long economic cycles, a dual moving-average crossover is used to time continuation and reversal on both the currency and yield charts. The rule treats a shorter 10-day average crossing a longer 40-day average as a continuation or reversal signal.

A late-May 1991 bullish cross is cited as confirming a dollar rally.

The late July reversal

In late July 1991, after German banks signaled likely higher rates, the U.S. long-term yield declined. The short and long averages crossed again, and a mark trend reversal is described as flashing while the yield and dollar had already peaked and the mark had bottomed.

A ten-day relative strength index as an early warning

A ten-day relative strength index is a short-lookback oscillator used here to mark exits from oversold readings and to flag a possible turn before the averages cross.

That 10-day relative strength index is described as leaving oversold conditions at the start of the pre-March 1991 dollar upswing and as signaling a reversal as early as 21 June, before the dual-average cross.

Editorial: Keep that oscillator in a warning role. The archive sequence places the relative-strength turn ahead of the average cross, but it does not replace the 10-day versus 40-day confirmation that a rate cycle has persisted.

After the July break

After the July break, the mark is characterized as remaining likely higher until the U.S. yield turns up again. A later yield bottom is named as the next formation that would slow that advance.

Editorial: The archive is describing a historical sequence, not a standing forecast. The next check it names is whether the U.S. long-term yield turns up, not a claim about later markets.