Benchmark Treasury yield retreats; support comes into view
TLT•The U.S. 10-year Treasury yield fell more than 10 basis points to about 5.06%, after reaching 5.3293% on Wednesday. The article identifies initial support at 5.04%-5.02%, with a break below that zone potentially opening a move toward 4.92%.
1. Yields reverse lower
Treasuries rallied on Wednesday afternoon after an initial selloff in response to a hot inflation report, leaving yields lower across most maturities. The reversal continued Thursday despite hotter-than-expected producer prices, stronger-than-expected retail sales and in-line weekly jobless claims.
2. Technical levels in focus
The 10-year yield reached 5.3293% on Wednesday, short of its recent 5.3645% peak, then moved below the upper yearly Bollinger Band near 5.10%-5.11%. The article says initial support is at 5.04%-5.02%; a break below could bring 4.92% into view, followed by the 20-week moving average near 4.76%. Resistance is identified at 5.157%-5.177%, while a move above 5.3645% could shift attention to 5.48%-5.52%.
3. Inflation debate continues
The retreat comes as investors weigh firm inflation data against Federal Reserve officials’ comments suggesting the central bank is in no hurry to resume rate hikes. The article also notes that the weekly RSI has fallen below 70 from a peak near 85, indicating weaker upside momentum in yields.
