Treasury report for the week of July 11

July 12, 2016 09:25 AM

30-year Treasury bond

Last week the 30-year Treasury Bond  ground higher and finished the week posting another new all-time contract high and contract high settlement. The USU went out on the highs for the week as the Bond traded in a slightly below average 3-17-point weekly range (4-pts was last year’s average) and settled up 3-08-points on the week and up 22-ticks on the session at 176-30. No change to the bullish technical outlook.

Although the treasury market is ripe for at least a correction there are no significant technical indicators or patterns suggesting such a move. Higher prices are expected and now that the Bond is in uncharted territory the only upside levels to target are weekly and monthly pivot resistance. This week the Bond should trade between 174-22 possibly 173-25/22 and 178-07 or 179-17/22. Today the USU should trade between 176-00 and 177-09 or 177-25.
Support can be found at 176-00, 175-02, 174-22, 173-25/22, 173-07, 172-28, 172-17, 170-28/26, 170-17, 169-31, 169-05, 168-14/11, 168-05, 167-19, 166-12, 165-25, 165-20/19, 165-04 and 164-30 (pre-release June Employment report). Resistance should be met at 177-09, 177-25, 178-07, 179-17 and 179-22.   

10-year Treasury note
Friday the 10-year remained range bound and tested its weekly low and rebounded to finish the week near its upper weekly high. The TYU traded in a slightly below average 1-07+-point weekly range and settled up 23-ticks on the week and up 3+-ticks on the session at 133-25+. All three trends are bullish as the technical outlook continues to target 135-29. Until the Note can bust out of last week’s range I look for the TYU to consolidate and trade this week between 133-00/132-28 and 134-07/10. A break of the upper level and the Note should test 134-30. If the lower level is broken the TYU should test 132-14/12. Today the TYU should trade between 133-17/16 and 134-00 or 134-07/10.
Support can be found at 133-18/16, 133-07 (minor), 133-02, 132-28, 132-23, 132-14/12, 132-06, 131-27, 131-18/16, 131-02, 130-30/29, 130-20/19, 130-02/01 (pre-release June Employment report), 129-16, 129-11, 129-07/05, 128-28, 128-24, 128-14 and 128-01.  Resistance should be met at 133-30, 134-07/10, 134-30, 135-16 and 135-29.

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