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 Group

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 /

  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • 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, ...
  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • 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

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 Capital Markets UK Ltd. (Saxo) and the Saxo Bank Group provides 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. Access and use of this website is subject to: (i) the Terms of Use; (ii) the full Disclaimer; (iii) the Risk Warning; and (iv) any other notice or terms applying to Saxo’s news and research.

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 for more details.

Saxo
40 Bank Street, 26th floor
E14 5DA
London
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo is a registered Trading Name of Saxo Capital Markets UK Ltd (‘Saxo’). Saxo is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992