10-Yr U.S. Treasury Notes (TY) Futures Technical Analysis – October 30, 2014 Forecast
December 10-Year U.S. Treasury Notes broke sharply following the release of the U.S. Federal Open Market Committee monetary policy announcement late Wednesday. Interest rates spiked on the news, triggering a round of selling pressure.
Technically, the main range is 123’16 to 130’17. The retracement zone created by this range is 127’00.5 to 126’06. T-Notes closed inside this range yesterday. Trader reaction to this zone will set the tone for the day.
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Holding between 127’00.5 to 126’06 will indicate investor indecision. Taking out the Fibonacci level at 126’06 should pressure the market into an uptrending angle at 126’00. This is followed by another uptrending angle at 125’10.
Overtaking 127’00.5 will set a bullish tone. The market will accelerate to the upside if buyers can overcome a pair of uptrending angles at 127’04 and 127’06. If this occurs then look for a possible spike up to another angle at 127’25.
Fundamentally, in its statement, Fed policymakers implied the central bank was moving toward a tighter monetary policy more quickly than its peers at the Bank of England and the European Central Bank.
The Fed also announced the end to its monthly bond-buying at the end of this month. In addition, it said in its statement that interest rates could rise sooner or later, depending on how the economy performs. The central bank also dropped the word “significant” in describing underutilization of the labor market. This serves as a sign that it has turned more upbeat on the jobs market.
If you like trading ranges then look for buyers at 126’06 and sellers at 127’00.5. Otherwise play for breakouts and breakdowns today, but make sure you have volume and order flow on your side when buying strength and selling weakness.