Treasury report for the week of June 27

June 26, 2016 10:41 PM

30-year Treasury bond

For most of last week’s trade the 30-year Treasury bond satisfied the previous week’s island top reversal pattern (June 15, 16 and 17th).  Friday bonds snapped back as a result of the Brexit vote as USU established its entire weekly range, 8-points (double a typical weekly range) and settled up 3-28-points on the session and up 26-ticks on the week at 169-31. 

 As impressive as last week’s move was, all three trends remain bullish and suggest higher prices as the long bond has entered uncharted territory and posted an all-time contract high.  Higher prices are expected, however, recovering nearly four points of Friday’s weekly gains and settling in the middle of last week’s price action (169-25) suggests consolidation with a bullish bias as the technical outlook remains bullish. 

For the week USU should trade between 168-12/11 and 171-07/09.  If the lower level is broken bonds should test 166-22/15.  Today USU should trade between 169-05 and either 170-16/18 or 171-07/09.

Support:  169-05, 168-12/11, 167-26, 166-22, 166-15, 165-20/19, 165-04, 164-30 (pre-release June Employment data), 163-14, 162-30/27, 162-15, 162-01/00 and 161-24/23. 

Resistance:  170-06, 170-17 (minor), 170-26/28, 171-07/09, 171-20, 172-17 and 173-25.


10-year Treasury note

For most of last week the 10-year Treasury note market was focused on correcting from the previous week’s island top reversal pattern (June 15, 16 and 17th).  The 10-year more than doubled a typical weekly range on Friday as the note traded in a 3-17+-point weekly range and settled up 1-18-points on the week and up 16+-ticks on the week at 132-12. 

As impressive as last week’s price action was that the 10-year recovered a good portion of its overnight gains on Friday and settled in the middle of last week’s price action (132-14) and posted a new TYU contract and settlement high.  All three trends are bullish however, look for consolidations with a bullish bias as the upside target remains 135-29 (see June 17th report). 

 For the week the TYU should trade between at least 131-18/16 or 131-01/130-29 and at least 132-22/24 or 133-00/01.  Today the TYU should trade between 132-02/00 possibly 131-27 and 132-20 possibly 132-30/133-01.

Support:  132-02, 131-27, 131-18/16, 131-04, 130-30/29, 130-20/19, 130-02/01 (pre-release June Employment data), 129-22, 129-16, 129-11, 129-07/05, 128-28, 128-24, 128-18, 128-14 and 128-01/127-31. 

Resistance: 132-20, 132-24+, 132-30/133-01, 133-25, 134-07/10, 134-30, 135-16 and 135-29.



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