Technical Update - US 10 years yields in for a correction to 2.50%
Kim Cramer Larsson
Technical Analyst, Saxo Bank
US 10 years yield reached inverted Shoulder-Head-Shoulder price target a few points below the 2019 high at 3.25%. It seems to be correction time.
On the daily chart a Shoulder-Head-Shoulder pattern has been confirmed after yield broke below the Neckline.
The vertical arrows indicate the potential target levels i.e. around 2.5% . That is also around where there is a cluster of Fibonacci levels AND more or less in the middle of the consolidation area 2.55-2.31.
RSI showing divergence indicating we are to see lower yield levels. Look out for potential Pullback where yield could test Neckline from the underside before resume down move. If a Pullback pulls the yield back above the Neckline the SHS pattern is demolished and 3.25% is likely to be tested.
The Interest rate future has formed identical picture, inverted obviously and broken bullish out of its short term down trend. 122 12/32 – 123 levels is likely price targets.
If Future prices drop below the falling Neckline lows around 117 are likely to be tested and medium term and longer term down trend resumes.
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