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Bond of the Week: 27 August 2015
Bond of the Week : 27 August 2015
The US 10-year Bond Yield has encountered firm support near 1.9% this week, to push back up to the May/mid-August top formation. The yield is about to challenge resistance along the 2.2% region. That barrier is reinforced by the presence of both the 50 and 200-day Moving Averages. In the event of a break through, the next chart resistance is near 2.3%.
US - The Five-year Treasury Note future surged up to a new high on 24 August, at 120.785. Here, intraday resistance was encountered; and, against the background of a high RSI, prices started to unwind from overbought. Short-term uptrend support is around 119; near the 50-day MA. The 200-day MA is not far off either.
UK - The overbought rally by the Long Gilt future stalled near prior resistance from the April high at 119.49 during the course of the week. Prices have drifted to potential support at the upper side of the May/early-August base. One would expect that pattern should cushion the decline before long.
Europe - The gradual advance off the floor near 145 by the Euro 30-year Buxl contract has baulked at the late-May high (161.02), which is close to the 200-day MA. Some steadying has since occurred near the shorter-term MA, though this support has yet to be confirmed. In the event of a deeper correction, the sideways area along 150 could come under scrutiny.
Asia - The advance by the 10-year JGB contract shows a loss of impetus on the approach to the April high (147.89). However, a more forceful down move would be required to reconfirm resistance at that barrier.
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