US 10-yr yield – rally overdone or more to come?

The global benchmark for the rates – the US 10-year Treasury yield has rallied this month from 1.77% to a high of 2.417%.

Such a sharp rise in yields in such a short period of time is undesirable since the world is awash with debt…as noted by Nicole Elliot on yesterday’s Finance show

Marc Ostwald, Strategist at ADMISI also noted the sharp spike is overdone on today’s Finance show. However, he also makes an important point – The rise in yields is not only due to Trump Bump and the resulting rise in Fed rate hike bets, but also due to the fact that China and Gulf nations are liquidating their treasury holdings.

Coming to technicals – Monthly chart

The yield has retraced 23.6% of the drop from 2006 high to 2016 low. The Fibo level is 2.269%.

We also see a bullish break from the falling channel .

Furthermore, the monthly 50-MA appears to have bottomed out.

To me, technicals suggest the yield has bottomed out. Agreed that the spike is overdone and technical correction is likely. However, the yield may have made a long-term bottom.
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