Long-term US government bond yields reached a critical area

Technically speaking, the US 30 years government bond yields curve, from a long term point of view, is still in a bear market. But looking on a short and medium term basis, we must consider some elements to understand if prices could be in a retracement phase of a potential short term rising trend.

First of all, the 30 years Treasury curve, the week that Trump was elected, advanced with the most highly percent daily change in 30 years (1). The price broke the medium term downtrendline (2) but was not able to overcome the previous high around 3,25 of June 2015 (3).

Looking on a medium term chart, we can note that prices are now on a support zone (c), that was previously, in March (a) and April (b) 2016, a resistance level. The oscillator shows a weakness of the prices (e) and probably we can consider a good area for a new higher low, the 2.60/2.75 zone. In this area we have the 38,2% and 50% Fibonacci levels, the 2,75 support line, and the open of the big green weekly candle that followed Trump election (d).

Mario Valentino GUFFANTI – SAMT Vice President – Lugano Chapter – mario.guffanti@samt-org.ch

Disclaimer: the above article is for general information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.