Technical Update - US Treasury yields in falling corrective patterns. Maybe new direction in coming days Technical Update - US Treasury yields in falling corrective patterns. Maybe new direction in coming days Technical Update - US Treasury yields in falling corrective patterns. Maybe new direction in coming days

Technical Update - US Treasury yields in falling corrective patterns. Maybe new direction in coming days

Bonds 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Today's Saxo Market Call podcast.
Today's Market Quick Take from the Saxo Strategy Team

US 2-year Treasury yields
are moving in a falling channel like pattern since its peak in November retracing 0.382 of the Q3 bullish move at 4.04%.
For the 2-year yields to reverse the current falling trend a close above the upper falling trendline is needed. However, strong resistance at 4.45% is key for further upside if upper falling trendline is broken.
If Yields can break above 4.45% there is potential to test previous peak at 4.80.
A break below 4% could see the 2-year yields dropping to the 0.618 retracement at 3.57. 200 daily SMA will provide some support.

us2year yields d 30jan
Source: Bloomberg

US 5-year Treasury yields pattern similar to the 2-year. Moving in a falling channel like pattern since its peak in November and has retraced almost 0.681 of the Q3 bullish move bouncing from 200 daily SMA.

For the 2-year yields to reverse the current falling trend a close above the 55 daily SMA and the upper falling trendline is needed. A close above 4% is likely to give energy to test the October peak at 4.50%.
A close below 3.37 and below the 200 daily SMA is likely to extend the down trend to 3%

Medium-to longer term. A break above October peak at 4.50% will pave the way for a move to 4.88 possibly to strong resistance at 5.30%. Monthly chart

us5year yields d 30jan
Source: Bloomberg
US 10-year yields is forming a falling wedge like pattern (not yet confirmed it is a wedge since price must touch the trendlines a total of five times) . Trend and sentiment is bearish with the yields below declining  55 daily SMA and RSI showing negative sentiment.
For 10-year yields to reverse the short-term falling trend a close above the falling trend line is minimum requirement. And if that scenario plays there is strong resistance at 3.90%.
Yields bounced off 200 daily SMA but if it does close below there could be further down side to 0.618 retracement at 3.22  

us10year yields d 30jan
Source: Saxo Group
US 30-year yields are forming what appears to be a triangle like pattern after a bounce from the 0.618 retracement. Break out from the triangle for direction.
RSI is currently showing positive sentiment indicating a move higher in yields but a break of the upper falling trendline and a move above 55 SMA is needed.
Key resistance at around 4%.
A bearish break out and a close below the 200 daily SMA could push yields down towards 3% with minor support at around 3.22%

us30year yields d 30jan
Source: Saxo Group

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • 350x200 peter

    Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • 350x200 althea

    Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • 350x200 peter

    Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • 350x200 charu (1)

    FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • 350x200 ole

    Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900
Hellerup
Denmark

Contact Saxo

Select region

International
International

Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.