Given what we think we know — haters gonna hate no matter what the levels (ie yesterdays weaker prices brought out even MORE technical sellers) and TLINES, necklines, support (1.705) and resistance (1.61), a few technical thoughts from BofA dropped yesterday,
Key takeaways
The US 10Y and 30Y yield charts are in choppy ranges even after an intriguing and stretched 11 day selloff exceeded +30bps.
Is this selloff different than the failed selloffs of 2H21? It could be if relevant weekly breakouts occur that echo 1Q21.
Weekly closes of 10Y yield > 1.7% and 30Y > 2.06% elevate bearish duration views. Above 1.79% and 2.18% = 1Q21 rhyme time.
Specifically on 30yy, a comment and visual to watch after the data dust settles tomorrow
… 30Y: A weekly close above 2.06% will look bearish
30Y yield is leading 10Y in regard to technical breakouts. If 30Y yield makes a weekly close above 2.06% then it will break the 2021 declining channel (Chart 4). On Tuesday 30Y yield broke above the Nov 2021 highs, a trend line from last year and briefly the 200d SMA. 30Y is trying to break the 2021 downtrend (in yield) to earn a “sell the rallies” bias. After 2.06% it faces 2.18% to consider a 1Q21 rhyme (Chart 3).
… US 30yr Yield Daily Chart: Breaking out and possibly leading 10Y
The 30Y yield is leading with regard to technical breakouts in comparison to the 10Y. The 30Y yield is now above the Nov 2021 highs, a trend line from last year and the 200d SMA. In other words, this chart has a little more of a “sell the rallies” feel than the 10Y because it’s actually breaking some levels and the 10Y is still below 1.7%.
Weekly closes>daily closes and folks are just getting their bearish game ON which increases the significance of tomorrows end of day pricing, incorporating FOMC MINUTES from 3wks ago) as well as NFP.