CBOT 30-Yr T-Bonds:
Sideways move. We are looking for USAA to continue meandering between 118-05 and 115-25.
CBOT 10-Year T-Notes:
The long lower shadow on today’s candlestick suggests that the short-term corrective decline is likely to end soon as 10s have reached our objective 116-10. We are looking for the uptrend to resume within the next few sessions, as the long lower shadow on today’s candlestick illustrates keen buying interest on the lows.
As long as 10s remain above the trendline (116-10 on 03/15 and 116-12 on 03/16), they are positioned to resume their rise, and challenge resistance around 117-00 / 117-02, then 117-07 and then 117-17 / 117-18+.
ICE Dollar Index:
The Dollar Index broke key support today, at the convergence of the trendline started in December, and of the neckline of a Head and Shoulders top. It is holding by a thread, namely support at 79.64.
Unless the Dollar Index can return above the neckline (approximately 80.32 on Monday and 80.41 on Tuesday), support around 79.64 will remain at immediate risk. If that level does not hold, support at 79.09 and 78.83 would be unlikely to stand much in the way of a decline towards 78.50, with the measured objective of the Head and Shoulders and the 61.8% retracement converging in that area.
Invalidation: from current levels, only a close above 80.45 would invalidate the short-term bearish outlook, and point to a return towards resistance at 80.88. After that, resistance is 81.20, followed by 81.34 and 81.43.
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