US 10 year yield moves to a new high for year but backs off. What next?

The US 10-year yield has been pushing to the upside in April helped by the shift in perception that the Fed is on hold for longer and may cut less in 2024. The 10 year yield was trading near 4.20% at the beginning of the month. It moved to a high today of 4.429% in trading today.

Technically, the move to the upside took the yield back above its 100 and 200-hour moving averages (blue and green lines in the chart above). It also moved – with momentum – above the 38.2% retracement of the move down from the October 23 high to the December 28 low. That retracement came in at 4.259%.

The momentum move higher today took the yield above the 50% midpoint of that same move lower at 4.404%. Yesterday, the yield stalled against that level.

The ISM data today pushed the yield back to the downside and back below the 50% retracement level. That failure may signal the start of a decline. What would give buyers of bonds/lower yields would be a move below the swing area between 4.335 and 4.350% (see red number circles and yellow area on the chart above). Getting and staying below that area would be more bearish.

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This article was written by Greg Michalowski at Source