(Bloomberg) -- The Treasury 10-year yield may be set to keep rising after bouncing off a key technical level, according to JPMorgan Chase & Co.
A combination of positioning indicators and momentum-based analysis suggests a short-term reversal after the global bond benchmark dipped into the 2.01% to 2.08% zone before recovering, technical strategist Jason Hunter wrote in a note Tuesday. Yields may climb toward the 2.24% level, with a move even higher attracting buyers again, he said.
“Treasury technicals favor some near-term mean reversion to higher yields,” Hunter wrote. “We expect significant buying interest near the 2.28%-2.36% March to May breakout area if a backup extends that far.”
The 10-year yield fell as low as 2.05% on June 7 after a disappointing U.S. jobs report bolstered bets the Federal Reserve would cut interest rates, before subsequently recovering. It was at 2.13% Wednesday in early London trading.
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The moves suggest yields are at least temporarily basing near the 2.08% level, according to Hunter.