2chartz M-compressed

Technical Update - US 10-year Treasury yields indicated downtrend but the future is not agreeing. Higher yields in the cards

Bonds 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  US 10-year Treasury Yields indicated reversal of uptrend last week after closing below 4.50, but the future didn’t agree and has now resumed downtrend. Yields could move to 4.80


US 10-year Treasury yields did close below 4.50 last week and below the lower rising trendline indicating a possible downtrend. However, the RSI didn’t close below 40 threshold i.e., not confirming a downtrend.
Wit the bounce back above the rising trendline and above the 55 DMA yields could be resuming uptrend.

Currently testing the 0.382 retracement a close above could lead to further upside to the 0.618 retracement at around 4.80.
The RSI is testing its falling trendline and a close above will indicate yields are likely to rise to 4.80 level.

A close above 4.80 would be an indication of previous peak at 4.01 is likely to be tested.

A close below last week’s low at 4.47 will establish a downtrend. A close below 4.47 will also most likely push the RSI below 40 thus confirming the bearish scenario
us10yy d 1311
Source all charts and data: Saxo Group

US 10-year Treasury future is from a technical point of view the most interesting and the instrument that is expressing the real interest the best, simply because it expresses actual trading. The Yield chart is merely “just” a calculation or derivative of the underlying instrument i.e., the future.

The future was rejected at the upper falling trendline and resistance at around 108 27/32, and the Cloud (shaded area)
Three times the future has failed to close above 108 16/32 and with the bearish candle 9th November the sellers have taken back control.

RSI has twice been rejected at the 60 threshold i.e., still showing negative sentiment and is currently testing its rising trendline. A daily close below is likely to send RSI back below the 40 threshold which would strongly indicate the US 10-year Treasury future to dropping towards October lows around 105 10/32.
Key support at the 0.618 retracement at around 106 20/32
us10yfut d 1311

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