US 2Y Yield - Still more room on the upside
US 10Y Yield - Still more room on the upside
US10Y – US2Y - Still aiming at zero
GER 10Y Yield - Heading towards the 200dma
US10Y-GER10Y - Another small downswing expected
Two-year rates have been on an uptrend for the past couple weeks while RSI is still at a neutral level and targets remain higher. We still expect rates to reach the 4.48% – 4.68% area before heading back South.
Ten-year rates have been trading in a UT channel for four weeks, RSI is well oriented and not overbought while targets are still higher. We expect a continuation of the uptrend towards 4.30% - 4.50% before a likely reversal.
Last week the 10y-2y spread stalled right on the late October high @ -0.15% along with an overbought RSI. Now that this indicator is not as stretched, we favor an upside breakout towards zero over a double top.
Bund rates have been in a steep up trend since late December and while MACD is mildly declining, RSI is not yet overbought. We expect an extension of the rally up to the 200dma @ 2.48% before a reversal of trend.
The chart pattern is blurry, and both RSI & MACD are near neutral levels. We still expect a final down leg toward 1.65%, albeit with a low conviction level.
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About the Author: Joachim DJIAN
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