US 10-year yields face strong support at 1.30% - UOB
|Quek Ser Leang at UOB Group’s Global Economics & Markets Research sees yields of the key US 10-year note facing strong support in the 1.30% level.
Key Quotes
“From a late January low of around 1.000%, US 10-year yield staged a strong and impulsive rally that sent it rocketing to a high of 1.776% in April. In view of the overbought conditions, the pullback from the high was not surprising. While the pullback is viewed as a correction, it has since gathered momentum and yesterday (06 July), it felled sharply by 7.9 bps, its largest 1-day drop since late February. Despite the sharp drop, there is chance for the yield to move back up towards the April’s high of 1.776% in the months ahead. However, a break of the key (and very strong) support near 1.300% (55-week exponential moving average, rising trend-line from last August as well as minor trend-line on the daily chart) would suggest that 1.776% could be a more significant top than is currently expected. To look at it another way, a break of 1.300% would indicate that 1.776% may not come back into the picture for the next 2 to 3 months, possibly longer.”
“In terms of the next several weeks, the 10-year yield is expected to trade under pressure unless it can move back above 1.510%. The next major resistance above 1.510% is at 1.630%. A break of 1.630% would greatly increase the odds for the yield to move back up to 1.776%.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.