US 10 year yield edged higher to 3.003 overnight and breached 3% handle briefly. Then, it failed to sustain above 3% and closed at 2.983, up only 0.010. Comparing to Monday, it’s slightly better as it closed above open of regular trading hours. But from hourly chart point of view, TNX is losing some momentum. Hourly MACD dipped below signal line while RSI also dipped from overbought region. That’s what we usually see when a bullish move is taking, or about to take, a breath.
And bear in mind again that 3% is an important psychological level for many investors. And there is a key resistance of 3.036, 2013 high. These could both limit the strength of TNX for the very near term. And, judge from the reactions in forex markets too. Dollar only managed to extend gains against Yen and Swiss Franc yesterday when TNX breached 3%. We might see some sluggish trading today. But of course, ECB, UK and US GDP are still expected to trigger more volatility before the week ends.
