Technical Update - US 10-year Treasury Yields breaking key supports. Likely to drop further . Euro Bunds facing resistance
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
US 10-year Treasury yields broke below key support at 2.71% collapsing to test next support at 2.55. If it closes below 2.55, which is likely given that Bollinger bands are expanding and RSI below 40, next key strong support is at around 2.31. If that scenario plays out Yields are likely to bounce from that support.
The 10-year US Treasury Note closed above key resistance at 120 31/32. A move to 123 – 123½ seems likely. However, a minor correction to test the now support at 120 31/32 should be expected before next move higher.
To reverse the trend a close below 119 19/32 is needed.
Euro Bunds have been trading in a rising channel testing 159.79 resistance. Expect a correction from here possibly down to around 156-155 i.e the lower rising trendline in the channel, before a possible exhaustive push higher.
However, looking at the weekly chart Bunds have reached 0.-618 retracement of the Q2 sell off. RSI is close to 60 threshold and if rejected Bunds is likely to reverse upward move
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