Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
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Technical Update - US Treasury yields in falling corrective patterns. Maybe new direction in coming days
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.
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
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
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
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%
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%
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