I have been a long time bull in
US interest rate market. My first post written on 19th December 2012 called for an up move in the interest rates
upto 3% and beyond. In 2013 Interest rates moved up from 1.82% to 3.25% which
surprised the entire world.
When the world was expecting the up
move to continue, interest rates went sideways and today opinion of most
experts believe that interest rates will stay range bound for considerable
period of time. But the charts tell the other story.
If we look at the current 10 year
US treasury yield chart we can see that yield has done a 50% retracement at
2.3346% and now it has moved up to break the downward trending channel at 2.60.
If yield consistently stays above 2.60 the next target for Yield will be 3.25%
In the second chart is a monthly chart of 10 year yield. Here we can see that US 10 year yield is forming a inverse head and shoulder pattern. Once yield breaks above 3.25% the next target will be as high as 4% and beyond and this will be achieved in a very short time
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