Forex Investment and Currency Trading

U.S. yields: The trend across the two major cycle lows on U.S. 30 year yields is at 2.45% and on U.S. 10 year yields it is at 1.92%. These levels are expected to be tested.

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The picture here as well as on the VIX is similar to how that low was put in for 2002 and as long as we do not get at least a weekly close below that 768 level we still believe a decent bounce is possible. Stress that even if this is the case any bounce at this point remains in danger of being a “bear market bounce” rather than a turn.
It remain concerned that the absolute levels of volatility on the VIX and VXO are still too high and a decent bounce is going to be very difficult, if not [...]

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Despite a move to sub 1% on 2 year yields (Lowest in the cycle that began in 1980) the 2’s 10’s curve has failed to reach expected target in the 265-275 basis point area (Levels that were seen in 1992 and 2003) although at 261 basis points it came very close.
The down move seen since then has occurred as a bull flattener has taken place (Spread narrowing as a consequence of 10 year yields falling rather than 2 year yields rising).
Good trend line and 55 week moving average support now comes in around 157 basis points and looks likely to [...]

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Having come a long way in a short space of time a bounce (especially in these thin markets) cannot be ruled out. In all honesty we could not say that there are any particularly strong signs of this happening except for the magnitude of the acceleration to the downside being so aggressive. Any bounce, if it were to materialize, would likely struggle to sustain back over the 3.05-3.25% level. The recent breakout of that range does target around 2.20%

Longer term chart suggests that sub 2% eventually remains a danger

At this point in time it would certainly be increasingly difficult to [...]

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