The 08/04/24 blog “U.S. 30 – Year Treasury Yield – Fibonacci Time and Price Analysis” illustrated price and time targets for the U.S. 30 – year Treasury yield (TYX). Weekly Fibonacci time analysis targeted the first week of September 2024 for a potential turn. Daily Fibonacci time analysis targeted 08/30/24 for a possible turn date. Fibonacci price analysis revealed a potential bottoming zone from 3.40 to 3.70.
TYX declined into the time zone but is still above the bottoming target zone of 3.40 to 3.70.
Has an important TYX bottom been made? Perhaps, however there are two factors that hint TYX could continue trending lower.
The daily TYX chart courtesy of Trading View updates the action.
On 09/06/24 TYX reached 3.955, which is close to the bottom on 12/27/23 at 3.943. Daily RSI and MACD have bullish divergences. The situation with Stochastic is curious.
So far only the fast line – in blue has reached the oversold zone below 20.00. The slow line – in red is in the middle of the neutral zone. Bottoms are almost always made when both lines are in the oversold zone. The configuration on 09/06/24 hints at a near -term decline for TYX.
The other factor that could contribute to TYX trending lower is the U.S. FOMC interest rate decision on 09/18/24. It’s widely expected that they will cut short-term interest rates by at least .25 basis points, perhaps more. This could be a classic case of “buy the rumor sell the news”.
There’s an inverse relationship between yield/rates and bond prices. As bonds rise yield/rates fall. In this case as TYX declines the U.S. 30 – year Treasury bond prices rise.
It’s possible that U.S. 30 – year Treasury bonds could rally into an important top on or just before 09/18/24.
The two factors to focus on are the daily TYX Stochastic and the calendar – specifically September 18, 2024.
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