Source: Bloomberg

The euro-US dollar exchange rate tracks the spread between 10-Year US Treasuries and 10-year German Bunds. The regression coefficient over the past year (using high-frequency intraday data) is about 87%. Right now the euro exchange rate is considerably higher than the rate differential would predict (about two standard errors in stat-speak).

The indicated trade is to short the euro, short German Bunds, and go long Treasuries. That presumes that the euro will settle back into its normal relationship to the US-German rate spread.