US 10yr Yields: Range resistance likely to be soundly tested in 4Q - Westpac

Range trading (effectively 2.10-2.60%) for US 10yr Yields persists and although a more dynamic rise in yield has begun off 2.01%, the 2.30-2.40% should provide solid interim resistance, suggests Tim Riddell, Research Analyst at Westpac.

Key Quotes

“Daily momentum bodes caution and dips ought to hold 2.25-2.27% to maintain scope for full test of 2.40% within a potential extended rally towards 2.50-2.525%.”

“Weekly

• Weekly momentum proved to be decidedly supportive on the slump to 2.01%. The rise in momentum and dynamic style of weekly yields could signal a clear uptrend
• Yields look set to retest range resistance at 2.60-2.65% and could trigger a further surge towards long term pivotal level at 3.00-3.05%”

“Monthly

• The consolidation in monthly RSI’s has turned supportive and offsets the high level of Stochastics. This supports a further attempt to test critical range resistance
• The basing in yields in 2016 appears more convincing and so trend resistance is under threat in what could signal a clear turn in trend.”