Key Technical Bullets:
• Has been trading in a Head & Shoulder pattern since February
• Was recently rejected by key 2.81/82% level:
- Daily Ichimoku Cloud top
- 50% retracement of 2014 decline
- March high
• Coincided by daily RSI is failure ahead of key 60/65 level – Indicative of overall downtrend
• Broke below daily Ichimoku Cloud bottom at 2.68%
• Sees trendline support and H&S neckline around 2.62/63%
• Distance between the H&S top and the neckline is ~21 bps
• Daily RSI has broken below corresponding support in advance to yield
• Pattern becomes effective upon close below 2.62%
• If validated, Head & Shoulder measured move objective ~2.40/41%
• This corresponds with 38.2% retracement of the 2012-14 advance
Should US 10-year yield close below 2.62%, next levels to watch:
- 2.608% – Prior low
- 2.60% – Psychological & barrier/option related
- 2.568% – 2014 Low
- 2.50% – Psychological & barrier/option related
- 2.469% – Oct. 2013 Low
- 2.414% – 38.2% retracement
- 2.40/41% – Head & Shoulder measured move projection
Chart Source: Bloomberg, FOREX.com
Recommended Content
Editors’ Picks
USD/JPY briefly recaptures 160.00, then pulls back sharply
Having briefly recaptured 160.00, USD/JPY pulls back sharply toward 159.00 on potential Japanese FX intervention risks. The Yen tumbles amid news that Japan's PM lost 3 key seats in the by-election. Holiday-thinned trading exaggerates the USD/JPY price action.
AUD/USD extends gains above 0.6550 on risk flows, hawkish RBA expectations
AUD/USD extends gains above 0.6550 in the Asian session on Monday. The Aussie pair is underpinned by increased bets of an RBA rate hike at its May policy meeting after the previous week's hot Australian CPI data. Risk flows also power the pair's upside.
Gold stays weak below $2,350 amid risk-on mood, firmer USD
Gold price trades on a softer note below $2,350 early Monday. The recent US economic data showed that US inflationary pressures stayed firm, supporting the US Dollar at the expense of Gold price. The upbeat mood also adds to the weight on the bright metal.
Ethereum fees drops to lowest level since October, ETH sustains above $3,200
Ethereum’s high transaction fees has been a sticky issue for the blockchain in the past. This led to Layer 2 chains and scaling solutions developing alternatives for users looking to transact at a lower cost.
Week ahead: Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.