19chartM

Technical Update - US and Euro interest rate futures on the rise. Yields down

Bonds 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

US 10-year Treasury yields in short-term downtrend testing support. Will it drop to 3.50? 



US 10-year Treasury yields closed below support at 3.90 finding support around 3.84.
Daily RSI is bouncing off 40 threshold. However, when yields closed yesterday below 3.90 it confirmed a downtrend. (lower lows and lower highs) meaning there is downwards pressure. RSI Sentiment is just not yet supporting this. If yields take out lows from yesterday i.e., drops below 3.81 there is risk down to strong support around 3.56-3.40.
US 10 Y d 11nov
Source all charts and data: Saxo Group

 

The US 10-year T-Note is in a confirmed short-term uptrend (higher highs and higher lows). RSI still rejected at 60, however, but there is likely more upside for the T-Note future. Strong resistance around 113 29/32.
If the Future slides back below the upper falling trendline in the falling channel (blue lines) bears could get renewed energy to push the future lower towards October lows.

US 10 T note d 11nov

The Euro Bund future is testing its upper trend line in the falling channel. A close above resistance at 142.62 is set to be reached.
The Euro Bund future could be forming an inverted Shoulder-Head-Shoulder with two shoulders on each side with the second right shoulder yet to be formed. Neckline would be the upper falling trendline in the channel.
If that pattern unfolds then we can calculate a potential target after Neckline break. Distance from Head to Neckline is added to the price of the Neckline break.
I have drawn a possible scenario. If Euro Bund closes below first right shoulder at 135.76 this scenario is likely to be busted and the Bund future is likely to test October lows around 134

Eurobund d 11nov

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