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Bond of the Week: 26 May 2016

US 2yr Bond Yield points towards 1%




Early in May, the US 2-year Bond Yield successfully challenged support around the 0.7% region.  The ensuing rally has since become overbought, and indeed a loss of momentum is noted.  Still, the yield continues to head towards the strong mid-March barrier near 1%.



Weekly Comment:


Government Bond Futures 


US - The retreat from resistance at the early-April high by the 10-year Treasury Bond future has lost some impetus by prior support at the late-April low at 129.062.  However, a more forceful up move would be required to remove pressure from that area; and the 100-day Moving Average.  Next important chart support after that is at the March floor near 128.


UK - The Long Gilt future continues to find resistance at the February contract high at 122.32.  The latest drift from that barrier probes potential support from the shorter-term MA line, though the stronger platform is near the longer-term MA line; at the April floor near 119.


Europe - The Euro 30-year Buxl instrument is finding resistance beneath the early-April peak (172.68).  That said, however, a fall under support at the late-April low, at 162.14, would be required to provide evidence of top building.


Asia - In spite of yet another bounce from the 50-day MA, the 10-year JGB future continues to dither beneath resistance from the April high at 152.14.  Nonetheless, a sustained breach of that MA line would be needed to damage the pattern.

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