Technical Update - US Treasury yields on the rise starting with the short end. Will the long end follow? Technical Update - US Treasury yields on the rise starting with the short end. Will the long end follow? Technical Update - US Treasury yields on the rise starting with the short end. Will the long end follow?

Technical Update - US Treasury yields on the rise starting with the short end. Will the long end follow?

Bonds 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank Group

Summary:  US 2 and 5-year Treasury yields have formed bottom and reversal patterns followed by falling trend line break out
10-year yields confirmed bottom reversal pattern but still below falling trendline
30-year in wait and see position


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US 2-year Treasury yields formed a bottom and reversal pattern last week in the form of a Morning Doji star. (circled)
With the close yesterday above the upper trend line in its falling channel like pattern the 5-year Treasury yields have established a short-term uptrend.
Key resistance at 4.45. A close above 4.45 2-year yields will have resumed uptrend with short-term potential to test Q4 2022 peak at around 4.79.
To resume downtrend a close below 4.00 is needed.


Source: Saxo Group
5-year yields have broken above the upper trend line in its falling channel like pattern. With the close as of yesterday 5-year Treasury yields has established a short-term uptrend.
Key resistance at 4.00. A close above 4.00 yields will have resumed uptrend with short-term potential to test Q4 2022 peak at around 4.50.
To resume downtrend a close below 3.40.

Source: Tradingview

10-year yields seems to have found support at 3.32 and the 200 daily SMA forming what looks like a double bottom pattern that was confirmed with the close above 3.58 yesterday.
Still moving below the upper trend line in its falling channel like pattern though, and needs to close above to indicate trend reversal.
If breaking above the falling trendline there is short-term potential to 3.90 resistance. Minor resistnace at around 3.73.

Source: Saxo Group

30-year Treasury yields are still moving in its Symmetrical triangle like pattern. Break out needed for direction.
RSI is bullish however, indicating upper falling trendline is likely to be tested and broken. A close above 3.72 will confirm Double bottom pattern to unfold and the establishment of an uptrend strongly indicating the falling trendline will be broken.
If that scenario plays out there is no strong resistance until around 4%
To reverse this likely bullish trend a close below 3.50 is needed.

Source: Saxo Group

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