17 Feb 2015
Technical outlook for Treasuries – RBS
FXStreet (Barcelona) - William O’Donnell, Head of US Treasury Strategy at RBS, gives the key technical levels for US treasuries, and comments that rates are likely to remain “quite volatile in the near-term”.
Key Quotes
“This morning I see conflicting signals where we now have short-term oversold readings in many Treasury benchmarks and still overbought conditions in the long-term 10'y and 30y chart studies. This confusing mix leads me to assume that rates are likely to remain quite volatile in the near term—definitely until Friday's Greek deadline and perhaps leading up to the March 18th FOMC Statement release.”
“So I still think the sidelines and a neutral duration stance is the way to 'play' as charts, Greece/EU and weather impacts sort themselves out.”
“2s (0.65%)– Next major support doesn't emerge until ~0.80% where we found buyers back in the spring of 2011. Resistance seen at 0.40% where we'd close a gap left behind in late October. Daily momentum is mixed and oversold.”
“5s (1.53%)– Next major support comes in at 1.80% and just above. Nearby resistance lines up at ~1.155%. Daily momentum is still bearish but getting oversold now.”
“10s (2.04%)–Next major resistance comes in at ~1.60%, the May 2013 'lows'. Next support comes in ~2.40% with major support at 2.66% after that. Daily momentum is still bearish but into oversold readings.”
Key Quotes
“This morning I see conflicting signals where we now have short-term oversold readings in many Treasury benchmarks and still overbought conditions in the long-term 10'y and 30y chart studies. This confusing mix leads me to assume that rates are likely to remain quite volatile in the near term—definitely until Friday's Greek deadline and perhaps leading up to the March 18th FOMC Statement release.”
“So I still think the sidelines and a neutral duration stance is the way to 'play' as charts, Greece/EU and weather impacts sort themselves out.”
“2s (0.65%)– Next major support doesn't emerge until ~0.80% where we found buyers back in the spring of 2011. Resistance seen at 0.40% where we'd close a gap left behind in late October. Daily momentum is mixed and oversold.”
“5s (1.53%)– Next major support comes in at 1.80% and just above. Nearby resistance lines up at ~1.155%. Daily momentum is still bearish but getting oversold now.”
“10s (2.04%)–Next major resistance comes in at ~1.60%, the May 2013 'lows'. Next support comes in ~2.40% with major support at 2.66% after that. Daily momentum is still bearish but into oversold readings.”