Technical Update - US Treasury yields in falling corrective patterns. Maybe new direction in coming days Technical Update - US Treasury yields in falling corrective patterns. Maybe new direction in coming days Technical Update - US Treasury yields in falling corrective patterns. Maybe new direction in coming days

Technical Update - US Treasury yields in falling corrective patterns. Maybe new direction in coming days

Bonds 3 minutes to read
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Today's Saxo Market Call podcast.
Today's Market Quick Take from the Saxo Strategy Team

US 2-year Treasury yields
are moving in a falling channel like pattern since its peak in November retracing 0.382 of the Q3 bullish move at 4.04%.
For the 2-year yields to reverse the current falling trend a close above the upper falling trendline is needed. However, strong resistance at 4.45% is key for further upside if upper falling trendline is broken.
If Yields can break above 4.45% there is potential to test previous peak at 4.80.
A break below 4% could see the 2-year yields dropping to the 0.618 retracement at 3.57. 200 daily SMA will provide some support.

Source: Bloomberg

US 5-year Treasury yields pattern similar to the 2-year. Moving in a falling channel like pattern since its peak in November and has retraced almost 0.681 of the Q3 bullish move bouncing from 200 daily SMA.

For the 2-year yields to reverse the current falling trend a close above the 55 daily SMA and the upper falling trendline is needed. A close above 4% is likely to give energy to test the October peak at 4.50%.
A close below 3.37 and below the 200 daily SMA is likely to extend the down trend to 3%

Medium-to longer term. A break above October peak at 4.50% will pave the way for a move to 4.88 possibly to strong resistance at 5.30%. Monthly chart

Source: Bloomberg
US 10-year yields is forming a falling wedge like pattern (not yet confirmed it is a wedge since price must touch the trendlines a total of five times) . Trend and sentiment is bearish with the yields below declining  55 daily SMA and RSI showing negative sentiment.
For 10-year yields to reverse the short-term falling trend a close above the falling trend line is minimum requirement. And if that scenario plays there is strong resistance at 3.90%.
Yields bounced off 200 daily SMA but if it does close below there could be further down side to 0.618 retracement at 3.22  

Source: Saxo Group
US 30-year yields are forming what appears to be a triangle like pattern after a bounce from the 0.618 retracement. Break out from the triangle for direction.
RSI is currently showing positive sentiment indicating a move higher in yields but a break of the upper falling trendline and a move above 55 SMA is needed.
Key resistance at around 4%.
A bearish break out and a close below the 200 daily SMA could push yields down towards 3% with minor support at around 3.22%

Source: Saxo Group


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