Technical Update - US 10-year Treasury yields reversing trend. 3% is in the cards. Euro Bunds testing rising trendline
Kim Cramer Larsson
Technical Analyst, Saxo Bank
The 10-year US Treasury Yields broke above the short-term falling trendline yesterday and is now in a short-term uptrend but currently finding resistance at the 0.382 retracement.
If yields can close above the 0.382 retracement level and get back above the 55 SMA just below 3% there is resistance at 3.11 and around the 0.618 retracement. A close above is likely to push Yields to test June highs above 3.5%.
If on the other hand Yields drop back below the falling trend line bear trend is likely to resume for a move towards 2.55 key support.
As described in previous Technical Update on Yields the 10-year US T-Note Future formed a Bearish Engulfing top and reversal last week. The future has now broken below its rising trendline and could be set for a test of key support at 117 18/32. If the future closes below the key support June lows are in the cards.
The Euro Bund future is testing the lower rising trendline. A close below is likely to lead to a sell-off down to key support at 149.75.
If the Bund future manages to stay above the trendline and crawl back above 157.74 strong resistance at 159.79 is likely to be tested.
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