10-Year Yields Can’t Take Out 2% as Markets Stall

Price has broken back through support at 1.91% and is pushing lower.

Earlier in the week with yields sitting at 1.94%, we pondered whether or not 10-Yields could push above 2%.   Currently that answer is no, as price has broken back through support at 1.91% and is currently pushing lower at 1.814%.  Below here, support comes in at the rising trendline from October 8th near 1.75%.  Resistance is above at previous support of 1.91%, and then the ever looming 2.00%. 

Source: Tradingview, FOREX.com

Falling yields, means a falling US Dollar, or DXY.  On a 240-minute timeframe, price failed to take out the 50% retracement level from the highs on October 1st to the lows on November 1st.  Therefore, it has been unable to complete the target for the double bottom near 98.60.  Strong support comes into play below between 98.85 (the breakout of the double bottom) and 98.00 (horizontal support).  Resistance comes in at the recent highs of 98.45.  Above that is horizontal resistance and the 61.8% Fibonacci retracement level from the previously mentioned timeframe just above 98.60. 

Source: Tradingview, FOREX.com

Could falling yields and a falling US Dollar be a sign that there is downside ahead in stock indices as well?  Traditionally, this is the correlation.  S&P 500 has been in an uptrend since forever, but more recently,  the beginning of October and appears to be stalling today just below 3103.  If price breaks the lower upward sloping trendline of the channel near 3080, there is minor horizontal support is at 3059 and strong horizontal support is at 3026.  Resistance is back at the all-time highs of 3103.

Source: Tradingview, FOREX.com

Unfortunately, this week has been pretty slow in terms of volatility.  As the markets waits for the next catalyst to push them in either direction, be weary of more sideways action over the next few days. 

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account