Treasury yields at a crossroads? The implications for marketsThe long end of the US Treasury curve has been influential for FX markets recently. The rolling 10-day correlation between US 10-year yields with the DXY, EUR/USD, GBP/USD, and USD/JPY is either strongly positive or negative. Even gold shows a notable -0.73 correlation, highlighting the influence of long bonds on broader markets.
Given the inverse relationship between bond yields and prices, it’s no surprise that the correlation between 10-year yields and 10-year Treasury futures (shown in orange, left-hand pane) has been nearly perfectly negative over the past two weeks.
In terms of directional risks for yields moving forward, the right-hand pane showing US 10-year Treasury note futures is instructive. The price remains in a downtrend, repeatedly rejected since being established October. If this trend persists, it signals lower prices and higher yields.
That said, with the bullish hammer candle from the lows last week, coupled with RSI (14) and MACD which are providing bullish signals on momentum, you get the sense we may be in the early stages of a turning point.
If we were to see the price break the downtrend, resistance may be encountered at 113’00, a level that’s been tested from both sides in recent weeks. If that were to give way, it points to an environment of a softer US dollar and kinder conditions for longer duration assets and commodities.
Good luck!
DS
TNM2025 trade ideas
TN! 10 Year Note Futures Bull ScalpLooking for a pullback into bear channel after the strong selling of 10-year bond futures from Friday's job report. Yields jumped today, so I would think there's some buyers coming into US session. At least there's a decent chance.
Buying Opportunity in T-Notes? After putting in a bottom in mid-October, T-notes have rallied sharply higher. Patient bulls have been afforded few opportunities to enter the contracts on a pullback, but that may soon change. Pullbacks are a healthy part of any sustained rally, as they allow market participants to take profits from longer held positions, and reallocate capital in the direction of the prevailing trend.
Fundamental Snapshot :
T-Note prices are inversely related to yields - meaning that as yields decline, the price of T-Notes will rise. After the last Fed meeting, Chair Powell suggested that the Fed may be cutting rates as much as 3 times in 2024. As displayed on CME’s FedWatch Tool below, the market is pricing in a 77.2% probability that the first rate cut may come as soon as March. If that materializes, T-note prices should continue to press higher.
Talkin’ Technicals :
The white line on the bottom of the chart labeling short-term bearish divergence on RSI in the bottom indicates that the market is making successive new highs on decreasing momentum, and that the market remains in overbought territory. Meaning that the current rally is effectively running out of steam. Furthermore, volume has steadily decreased since the previous high. If there are no more bulls willing to enter the market, it will likely result in a pullback. A pullback on price will force current bulls to liquidate long positions to capture profit, and afford new bulls to enter the market amidst the correction. Fed policy is a major function in establishing the longer-term trend in T-notes and bonds. By lowering rates in 2024, one should expect both T-notes and bonds to perform well pricewise.
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10-Years Treasury Note: Weekly Head & Shoulders + Daily TriangleBearish continuation head and shoulders.
First entry on January 7, stopped on 13 January, second entry on February 4 on breakout confirmation of the daily triangle.
Risk / Reward 4.5
Potential target 135
10YR BondsMarkets bottom only through the 10 year bonds $TN forming a bottoming formation at 139, which roughly corresponds to 10YR interest rates topping at 2.2%. Might take a good week to churn out. Otherwise, adieu markets.
TNThe rally out of Oct 21 low - is it an evolving impulse, or a correction in a larger downtrend?
I think more likely it’s a fresh impulse - in which case it’s working on Wave 4 of 3.
treasury notes forecast thursday expecting a move up here
sep 17 a move higher, then a decline
good for a long scalp
TN1 IN 30MIN💰Hi friends
the graph of this market most likely shows an upward trend after market opening .
2h TO TRADE - VERY STRONG SUPPORT TO WATCH OUT - TN1! - 30MNThank you for your likes and shares! Much appreciated!
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The market has shown amazing entry point for a long trade down. The formation of a large wick followed by volumes later on gave us very profitable trades today.
The support line is very strong and the market failed to break it . This is it for today!
Another tentative might come in the next 2H but for the moment any entry done will be in the long direction. The probability of seeing the market rebounding on the support trend line being very high.
Trade from Monday and keep an eye in this strong support line.
Channel Down on 4HClear Channel Down on 4H after a 128'22 Lower High. TP 127'07 and 126'40 in extension.
