JICPT|US 10Y yield completed pullback, heading for previous high
Hello everyone. US 10Y yield and DXY(Dollar index) are the two I always keep close eyes on. As I mentioned previously, it's a risk-free rate that impacted a lot of things, e.g. stock valuations, loan rates.
The below line chart is one of my favorite that I created for cross-check US10 Y yield, Nasdaq and Gold. Normally, US10 Y yield goes the opposite with gold(negative correlation). It seems gold shrugged off the treasury yield today. Then, I checked the dollar index which face strong selling pressure after recent rally. The weakening dollar index support gold to go up by around $14. Of course, there're other factors, such as inflation. The big rally of gold happened on last Wednesday was a good example.
Back to the US 10Y yield, I added notes on the daily chart. You can see that the recently movement is mainly driven by better-than-expected economic data. The pullback completion is an indication that the yield is going to retest previous high of 1.77%. But I guess the 45% degree uprising angle couldn't sustained. It need to take a break(go sideways) in the next few days before attacking previous high. Overall, the normalization is inevitable. The yield will go back to pre-pandemic level of 2%.
So, if the yield keeps going up, I don't recommend holding gold for too long(day trade and short swing trade is okie). This is in line with my previous gold analysis-the triangle pattern. You can refer details in the below linked idea.
Also, I'd prefer S&P to Nasdaq for investment as the tech-heavy index will be impacted more by the rising yield.
If the yield goes high enough, it'll result in the strength of the dollar index. Remember what happened in early 1980s? However, I don't think things will go crazy in that scale.
What do you think? Give me a like if you think the post is useful.
The below line chart is one of my favorite that I created for cross-check US10 Y yield, Nasdaq and Gold. Normally, US10 Y yield goes the opposite with gold(negative correlation). It seems gold shrugged off the treasury yield today. Then, I checked the dollar index which face strong selling pressure after recent rally. The weakening dollar index support gold to go up by around $14. Of course, there're other factors, such as inflation. The big rally of gold happened on last Wednesday was a good example.
Back to the US 10Y yield, I added notes on the daily chart. You can see that the recently movement is mainly driven by better-than-expected economic data. The pullback completion is an indication that the yield is going to retest previous high of 1.77%. But I guess the 45% degree uprising angle couldn't sustained. It need to take a break(go sideways) in the next few days before attacking previous high. Overall, the normalization is inevitable. The yield will go back to pre-pandemic level of 2%.
So, if the yield keeps going up, I don't recommend holding gold for too long(day trade and short swing trade is okie). This is in line with my previous gold analysis-the triangle pattern. You can refer details in the below linked idea.
Also, I'd prefer S&P to Nasdaq for investment as the tech-heavy index will be impacted more by the rising yield.
If the yield goes high enough, it'll result in the strength of the dollar index. Remember what happened in early 1980s? However, I don't think things will go crazy in that scale.
What do you think? Give me a like if you think the post is useful.
Comment:
Yep. Heading for 1.7 level
plan your trade and trade your plan
