The yield on ten-year Treasury Notes broke support at 2.75 percent after penetrating the rising trendline. Both warn of trend weakness. Bearish divergence on 13-week Twiggs Momentum strengthens the signal and reversal below zero would warn of a primary down-trend. Breach of support at 2.50 still seems unlikely, but would offer a target of 2.00 percent*.
* Target calculation: 2.50 – ( 3.00 – 2.50 ) = 2.00
The Dollar Index, on the other hand, appears headed for another test of resistance at 81.50. Breakout would signal a primary advance to 83.00*, while recovery of 13-week Twiggs Momentum above zero would strengthen the signal. Reversal below 79.80 cannot be ruled out, with long-term rates falling, and would warn of another test of primary support at 79.00.
* Target calculation: 81.5 + ( 81.5 – 80 ) = 83