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Market Outlook

Chart of the week – US T-Note 10 YR (cash) further potential squeeze up

Chart of the week – US T-Note 10 YR (cash) 

US T-Note 10 YR (cash) further potential squeeze up

Short-term technical analysis

click to enlarge chart

Time stamped: 14 Jun 2021 at 8:00am SGT

Source: CMC Markets.

  • The 8-month of decline of -6.4% seen in the US T-Note 10 YR from its 4 August 2020 high of 140.51 may have found a medium-term inflection level of 131.65 (former descending resistance from May 2012 high & 38.2% Fibonacci retracement of the prior impulsive up move from 8 Oct 2018 low to 4 August 2020 high) coupled with a bullish divergence signal seen on its daily Relative Strength Index (RSI) at its oversold region on 8 Mar 2021.
  • Hence, the above mentioned elements suggest that the US 10-Note 10 YR may continue to see a further corrective rebound at this juncture with an upcoming key risk event on the horizon for this week; the Fed FOMC with its latest economic projections out on this Wednesday, 16 June at 1800/1830 GMT.
  • Short-term upside momentum seems to be intact as indicated by the positive configuration of the 4-hour Relative Strength Index (RSI) that is holding above a significant corresponding support at the 55% level. If the 133.10 key short-term pivotal support holds, the US T-Note 10 YR may see a further corrective up move/squeeze up towards the intermediate resistances of 134.95 and 136.05 (a Fibonacci retracement/expansion cluster & the descending trendline from 4 August 2020 high).
  • On the flipside, a 4-hour close below 133.10 invalidates the corrective up move scenario for a slide to retest the key medium-term support at 131.65.

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