The US 10 year benchmark has been rebuffed at 3% three times since 2013. It has now broken out with a clear and confident break. The rising pattern of lows since the big 2016 low gives us an ‘Ascending Triangle’ pattern. The 50- and 200-day moving averages crossed up in 2016. We have rising lows in the RSI and no divergence. The 2016 low was marked but a ‘Bullish Divergence’ in the MACD and we have had two higher lows since. We not the ‘Bearish Divergence’ in the MACD over 2016/7. We are watching (and expecting) the 2018 MACD high to break, negating the Divergence.
Moves from ‘Ascending Triangles’ are usually powerful. We not there is no resistance at the next 25bpt level and the yield should move swiftly to the next resistance at 3.5%. The impact on other markets and the world will increase as the yield increases.
Trevor Neils MSTA MCSI www.betagroup.co.uk