Will the 10 Year Treasury Yield Break Out?
Retail sales surge higher than expected on October 17th, Industrial Production comes in higher than expected, and Atlanta Fed GDP Now for Q3 was revised higher from 5.1% to 5.3%. With the economy and the consumer remaining resilient, is the 10 year primed to break out to new 52 week highs? Rates will continue to be dependent on economic data, and further resilience to higher yields is likely to lead to higher yields.
What's Next?
The 10 year yield has seen tremendous strength since breaking out above the 10/21/22 highs. We can see that as of late, the 10 year has traded within a parallel channel, which is roughly 35-40 basis points wide. Major resistance will be the previous highs on October 6th. This is defined in the chart as “Major Resistance.” If the 10 year can break and close above this level (4.88), the 10 year is likely to test the psychologically significant 5.00 handle.
Weaker than expected economic data or further escalating geopolitical conflict could provide a relief rally for treasuries, thus sending yields lower. As this 10 year yield contract is moving near a 45 degree angle, a faster moving average, like the 21 day EMA will provide for a better support level. Currently the 21 day EMA is at 4.61. A break and close below this level is likely to then test the parallel channel, where a break and close below the channel could neutralize this bullish trend.
Check out CME Group real-time data plans available on TradingView here: www.tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
What's Next?
The 10 year yield has seen tremendous strength since breaking out above the 10/21/22 highs. We can see that as of late, the 10 year has traded within a parallel channel, which is roughly 35-40 basis points wide. Major resistance will be the previous highs on October 6th. This is defined in the chart as “Major Resistance.” If the 10 year can break and close above this level (4.88), the 10 year is likely to test the psychologically significant 5.00 handle.
Weaker than expected economic data or further escalating geopolitical conflict could provide a relief rally for treasuries, thus sending yields lower. As this 10 year yield contract is moving near a 45 degree angle, a faster moving average, like the 21 day EMA will provide for a better support level. Currently the 21 day EMA is at 4.61. A break and close below this level is likely to then test the parallel channel, where a break and close below the channel could neutralize this bullish trend.
Check out CME Group real-time data plans available on TradingView here: www.tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.