JICPT|US 10Y yield completed pullback, heading for previous high for TVC:US10Y by JICPT

Hello everyone. US 10Y yield and DXY ( Dollar index ) are the two I always keep close eyes on. As I mentioned previously, it’s a risk-free rate that impacted a lot of things, e.g. stock valuations, loan rates.

The below line chart is one of my favorite that I created for cross-check US10 Y yield, Nasdaq and Gold . Normally, US10 Y yield goes the opposite with gold (negative correlation). It seems gold shrugged off the treasury yield today. Then, I checked the dollar index which face strong selling pressure after recent rally. The weakening dollar index support gold to go up by around $14. Of course, there’re other factors, such as inflation. The big rally of gold happened on last Wednesday was a good example.

Back to the US 10Y yield, I added notes on the daily chart . You can see that the recently movement is mainly driven by better-than-expected economic data. The pullback completion is an indication that the yield is going to retest previous high of 1.77%. But I guess the 45% degree uprising angle couldn’t sustained. It need to take a break(go sideways) in the next few days before attacking previous high. Overall, the normalization is inevitable. The yield will go back to pre-pandemic level of 2%.

So, if the yield keeps going up, I don’t recommend holding gold for too long(day trade and short swing trade is okie). This is in line with my previous gold analysis-the triangle pattern . You can refer details in the below linked idea.

Also, I’d prefer S&P to Nasdaq for investment as the tech-heavy index will be impacted more by the rising yield.

If the yield goes high enough, it’ll result in the strength of the dollar index . Remember what happened in early 1980s? However, I don’t think things will go crazy in that scale.

What do you think? Give me a like if you think the post is useful.

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