The US 2 year yield has moved back above 4.0% to 4.006% currently. That is up about 23 basis points on the day.

Technically, the yield is not only testing the natural level of 4.00%, but is also testing the 200 day moving average currently at 3.999%. Admittedly, the yield has been trading above and below the 200 day moving average of late.

Getting and staying above the 200 day moving average would have traders looking toward the high yield from last week at 4.259%.

US 2 Year Yield Testing Key MA

Drilling down to the hourly chart, in addition to testing the 200 day moving average, the yield is testing its 200 hour moving average. That moving average comes in at 4.004%. Like the 200 day moving average, the yield is trading just above that level (green line in the chart below).

Looking back to March 22, the yield tested the 200 hour moving average only to find traders leaning against the level. The inability to move above gave traders a reason to push back to the downside ahead of the FOMC rate decision. Traders took the yield down even further and below the 100 hour moving average on that day. The tumble lower did not stop until reaching 3.555% on Friday before rebounding into the close.

Now with the 200 day moving average and the 200 hour moving average at 4.0% along with the natural target level, traders will be looking for the next shove. Will the yield continue its move to the upside looking toward the 38.2% retracement of the move down from the March high at 4.139%, or will the yield rotate back to the downside. Rotating back below the 100 hour moving average of 3.955% would give traders looking for lower yields some comfort in the short term at least.