Bond Market Rallies After Inflation DataBonds have soared after yields collapsed due to CPI coming in slightly better than expected. This follows months of consistently high readings fueling a hawkish Fed. With this reading, the markets will likely start to anticipate a pivot to a less hawkish stance. ZN broke through our target of 110'27, and moved a full handle above that to 111'26. It is currently meeting resistance at 111'29 or so, where a red triangle on the KRI is confirming resistance. Watch for ZN to equilibrate as the news gets priced in. If we can keep going then 113'12 is the next target, otherwise, 110'27 should give support.
ZN1! trade ideas
Bonds Retrace from our LevelBonds hit resistance at 111'26, dipping back to support at 110'27. We anticipated this in our reports yesterday. It is likely we will continue the sideways correction from here, bound between these two levels. If ZN can break out, then 113'12 is the next target. We expect 110'05 to be a floor for now.
ZN1!: Short Signal with Entry/SL/TP
ZN1!
- Classic bearish pattern
- Our team expects retracement
SUGGESTED TRADE:
Swing Trade
Short ZN1!
Entry - 110.57812
Sl - 111.875000
Tp - 108.640625
Our Risk - 1%
Start protection of your profits from higher levels.
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Bonds Recover After CPIBonds took a dive to break lows and hit our target of 110'05. A green triangle on the KRI confirmed support and we immediately the dip was immediately bought back, and we recovered the range between 110'27 and 111'26. We are currently hugging the upper bound of this range. The move followed yet another hotter than expected CPI print and a slump in retail sales. The Kovach OBV is slumping, so we expect the range to hold as the markets digest this data.
Bond Market Gains from Risk Off ToneBonds appear to be gaining strength as yields relax and the US dollar pulls back hard. The Kovach OBV is edging up, but we have resistance confirmed by several red triangles on the KRI at current relative highs. We appear to be seeing a bull wedge forming, in an attempt to break through 113'00. If so, then 113'12 will be the next target. If not, we will find support again at 111'26.
The Bond Market Reacts to the FOMCBonds have slid further and there is no relief rally insight. The markets were hoping for a 'dovish hike' in the sense that the 75 bps hike would be followed by dovish rhetoric. In fact it was the opposite. Yields have maintained highs pressing prices further down. We are hugging 113'12 and expect support there. If not, we will use Fibonacci extension levels to determine support levels further down. Our targets are 115'03 and 115'29 if we get our relief rally.