10-year Treasury yields fall back to 1.28% so far today
The bond market is at a crossroads now after the double-bottom rebound at 1.13% looks to be stalling at the critical 1.30% level as well as the 200-day moving average (purple line), after having seen a strong push on Friday following the NFP report.
The big question for yields right now is whether or not we are seeing an end to the downside trend, with the series of lower highs and lower lows being challenged.
The double-bottom at 1.13% is one point working against that but a breach back above the 21-26 July highs around 1.30% to 1.31% will validate a further shift in technical sentiment for the bond market. So, what can we expect next?
To start the new week, it looks like perhaps we may see yields contained below 1.30% for now. The NFP report last week gave bond sellers some ammunition to regain some momentum but a further push may require some other catalyst.
That may likely come only on Wednesday when we get the release of US consumer price inflation data for July.
So far in European trading, the slight track lower in Treasury yields is seeing USD/JPY fall a little from 110.25 to 110.05 - which in itself is validating a series of lower highs and lower lows in the pair since the start of July trading:
The 110.00 level itself offers some form of natural support but below that, near-term support is seen closer to the key hourly moving averages @ 109.62-63 currently.
