US 10-year Treasury yields risk a corrective pullback – UOB

Quek Ser Leang at UOB Group’s Global Economics & Markets Research comments on the recent performance of US 10y yields.

Key Quotes

“US 10-year yields started to rally sharply in early Mar and on Monday (28 Mar) it rose to a near 3-year high of 2.557%. The subsequent decline from the higher appears to have breached a rising trend-line support on the daily chart and this has increased the risk of deeper corrective pullback. Furthermore, daily MACD is dropping quickly and daily RSI is unwinding from deeply overbought levels.”

“While the shorter-term bias is on the downside and a breach of the 21-day exponential moving average (currently at 2.200%) would not be surprising, the major support zone between 1.998% and 2.070% is unlikely to come under threat, at least not within this one month or so. On the upside, if the 10-year yield advances above 2.557%, it will face a major long-term declining trend-line resistance connecting the highs of June 2007 and Oct 2018 (level is currently at 2.620%).”