Technical Update - US, EU & UK yields are on the rise testing resistance levels

Technical Update - US, EU & UK yields are on the rise testing resistance levels

Bonds 4 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  US 2-year Treasury yields have broken bullish out of its Symmetrical Triangle
US 10- and 30-year Treasury yields are in a bullish trend testing 2022 peak
EuroBund 10-year yields trading in a slightly rising channel
UK 10-year Gilt yields are testing the July peak


US 2-year Treasury yields have broken bullish out of its Symmetrical Triangle like pattern and seems set to test the key strong resistance at around 5%
If closing above the road to 5.21 level is paved. However, a spike up to 5.32 should not be ruled out.
An instrument often moves 1.618 projection after a triangle breakout.

RSI is showing positive sentiment indicating higher yields.

To demolish this picture a close below 4.64 is needed

Source: Saxo Group

US 10-year Treasury yields are in a bullish trend close to be testing 2022 peak at 4.32. A pike up to the 1.618 projection at 4.34 is quite possible.
RSI is showing positive sentiment but currently there is divergence indicating a weakening of the bullish trend. However, if yields are closing above 4.32 the divergence is likely to be cancelled indicating further upside potential.

To reverse the uptrend a close below 3.95 is needed. If yields drop back below 4.15 without cancelling the RSI divergence the bullish picture could have come to an end.

Source: Saxo Group

US 30-year Treasury yields are testing the 2022 peak at around 4.42. Uptrend is strong with no RSI divergence (at the moment) indicating higher levels. A spike up to the 1.618 projection at 4.47 could be seen.

To reverse the uptrend a close below 4.14 is needed. If yields drop back below 4.30 the bullish picture is likely to be demolished.

Source: Tradingview

The EuroBund 10-year yields are still trading in a slightly rising channel close to be testing the upper rising trend line and resistnace at around 2.77.

There is minor RSI divergence, peak values are at same level i.e., not a clear signal. Yields are however, still in an uptrend and have closed above July peak suggesting higher levels. 2.77 is likely to be tested and broken. A move to 2.83 is in the cards.

However, if yields are closing below 2.63 we could see a short-term correction to around 2.55-2.50
A close below the lower rising trendline in the channel will demolish the bullish picture. A close below 2.40 will reverse it

Source: Tradingview

The UK 10-year Gilt yields are testing the July peak at around 4.71. A minor set back should be expected.
But despite RSI divergence there is likely to further upside potential. 4.90-5.06 i.e., 1.382-1.618 projection are in the cards.
To reverse the uptrend a close below 4.30

Source: Bloomberg

Quarterly Outlook

01 /

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Macro Strategy

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...

Content disclaimer

None of the information provided on this website constitutes an offer, solicitation, or endorsement to buy or sell any financial instrument, nor is it financial, investment, or trading advice. Saxo Bank A/S and its entities within the Saxo Bank Group provide execution-only services, with all trades and investments based on self-directed decisions. Analysis, research, and educational content is for informational purposes only and should not be considered advice nor a recommendation.

Saxo’s content may reflect the personal views of the author, which are subject to change without notice. Mentions of specific financial products are for illustrative purposes only and may serve to clarify financial literacy topics. Content classified as investment research is marketing material and does not meet legal requirements for independent research.

Before making any investment decisions, you should assess your own financial situation, needs, and objectives, and consider seeking independent professional advice. Saxo does not guarantee the accuracy or completeness of any information provided and assumes no liability for any errors, omissions, losses, or damages resulting from the use of this information.

Please refer to our full disclaimer and notification on non-independent investment research for more details.
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-mena/legal/disclaimer/saxo-disclaimer)


Business Hills Park – Building 4,
4th Floor, office 401, Dubai Hills Estate, P.O. Box 33641, Dubai, UAE

Contact Saxo

Select region

UAE
UAE

All trading and investing comes with risk, including but not limited to the potential to lose your entire invested amount.

Information on our international website (as selected from the globe drop-down) can be accessed worldwide and relates to Saxo Bank A/S as the parent company of the Saxo Bank Group. Any mention of the Saxo Bank Group refers to the overall organisation, including subsidiaries and branches under Saxo Bank A/S. Client agreements are made with the relevant Saxo entity based on your country of residence and are governed by the applicable laws of that entity's jurisdiction.

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