The yield on ten-year Treasury Notes recovered above resistance at 2.75 percent after penetrating the descending trendline, suggesting the correction is over. Follow-through (above say 2.80) would indicate another test of 3.00 percent. Bearish divergence on 13-week Twiggs Momentum, however, continues to warn of weakness. Breach of 2.50 is unlikely, but would offer a target of 2.00 percent*.
* Target calculation: 2.50 – ( 3.00 – 2.50 ) = 2.00
The Dollar Index continues to test resistance at 81.50. Breakout would signal a primary advance to 83.00*. Recovery of 13-week Twiggs Momentum above zero would strengthen the signal. Reversal below 79.70 is unlikely, but would warn of a primary down-trend — strengthened if support at 79.00 is broken.
* Target calculation: 81.5 + ( 81.5 – 80 ) = 83