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It's the moment of truth for U.S. Treasury Bonds, especially the 10-year, which has climbed from 1.64% on Jan 30 to Tuesday's recovery high at 2.09%.
Notice that yield is bumping up against its July-Feb resistance line, now in the vicinity of 2.10%-2.12%.
This represents the first serious challenge to the up-move in yield and where we will see if the yield "BULLS" really have control of the market -- no doubt in expectation of a Fed rate hike sooner than later in 2015 (June vs Sep, or Oct?) and possibly in reaction to an exodus of funds out of bonds into stocks (after the averages have climbed to new highs).
From a pattern perspective, the 10-year yield exhibits a very constructive (potentially very bullish) price pattern within its advance from 1.64% to 2.09%.
That said, I can also make the case that the current upmove is complete, which would mean that yield is ripe for a pullback into the 1.95%-1.90% area ahead of my expectation of the next upleg.
Only the emergence of a new-bullish catalyst in the upcoming hours will enable the 10-year yield to hurdle and sustain above 2.10%-2.12%.
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