Total Pageviews

5 Swing Trading Stock Picks: Best Opportunities for April 28 – May 16, 2025

on
0

10-Year Treasury Yield at a Crossroads: Rebound or Reversal After Powell’s Wait-and-See Stance?

on

US 10-Year Yield Technical Outlook: Early Signs of a Bullish Reversal Amid Structural Consolidation

Overview

The 10-Year U.S. Treasury yield remains a critical reference point in the global financial system, shaping interest rate expectations, equity valuations, and capital flows. As of April 17, 2025, the yield is trading near 4.32%, rebounding from recent lows and entering a technically sensitive region. This article provides a technical breakdown of the current price structure across both the weekly and monthly time frames. Momentum signals are beginning to shift, with short-term indicators showing signs of bullish recovery while longer-term charts point to potential exhaustion in upward momentum. All conclusions are based solely on chart-derived signals, with no reliance on macroeconomic projections or political developments.

Weekly Time Frame: Sideways Bias with Rejected Breakdown

As of mid-April 2025, the US 10-Year Treasury yield stands near 4.32%, showing renewed upward movement following a brief dip below short-term support. On the weekly chart, price action reflects a classic false breakdown scenario beneath a support zone near 4.10%, followed by a swift rebound that pushed yields back into the center of the prevailing range.

This recent rejection of lower levels and the emergence of a hammer-like candlestick in the previous week followed by a bullish candle this week indicate early signs of demand re-entering the market. The current price structure continues to respect a sideways bias that has remained in place since October 2023, with yields consolidating in a range between approximately 3.80% and 4.65%.

The symmetrical formation of lower highs and higher lows outlines a triangular or rectangle-style consolidation. Notably, the support near 4.10% held firm, triggering this week’s reversal. However, overhead resistance around 4.45% to 4.65% remains structurally significant and will need to be breached to confirm a breakout from this prolonged range.

Momentum Indicators – Weekly

  • Stochastic RSI (14,14,3)

    • %K: 38.45, %D: 22.75

    • A bullish crossover has recently occurred from the oversold zone. This is typically interpreted as an early sign of a potential bullish reversal or, at the very least, a transition into a bullish consolidation phase.

    • Despite the upward move, the %K and %D remain below the midpoint of 50, implying that further confirmation is necessary before calling a shift in the medium-term trend.

  • MACD (12,26,9)

    • The MACD line currently sits at -0.028%, still in negative territory.

    • The histogram bars are shrinking, suggesting waning bearish momentum.

    • The signal line is beginning to flatten, although a clear bullish crossover has not yet materialized.

These indicators, while not fully aligned in bullish confirmation, suggest that the downside momentum has weakened. The combination of a false breakdown, a bullish weekly candlestick setup, and a positive Stoch RSI crossover paints a cautiously optimistic picture for the weeks ahead.

Monthly Time Frame: Early Reversal Signals in a Structurally Elevated Market

Zooming out to the monthly chart provides broader context to the ongoing consolidation. The yield remains elevated relative to historical standards, currently resting at 4.32%, with price action continuing to oscillate within a wide band established post-2022.

The most recent monthly candle suggests stabilization after a pullback earlier this year, with the current April candle showing signs of recovery. The broader uptrend that started in 2020 remains technically intact, but the lack of higher highs since the October 2023 peak introduces caution.

The monthly structure does not suggest immediate breakout potential but rather a slow and deliberate price action environment, shaped by long-term macroeconomic recalibration. While the yield has failed to extend its uptrend, the market also shows resilience above the 3.80%–4.00% area, confirming that buyers are still active at those levels.

Momentum Indicators – Monthly

  • Stochastic RSI (14,14,3)

    • The Stochastic RSI has started to curl upward, emerging from deep oversold territory.

    • A crossover between %K and %D is forming, pointing to a potential early-stage reversal.

    • This indicator’s behavior aligns with the idea that the yield may be preparing to re-test upper resistance areas within its long-term range.

  • MACD (12,26,9)

    • The MACD line remains below the signal line but the downward slope has started to decelerate.

    • Histogram bars are gradually shrinking in magnitude, a classical sign of slowing bearish pressure.

    • Although a bullish crossover is not yet present, the flattening of momentum suggests a potential transition phase.

Collectively, the monthly chart suggests that the US 10-Year yield is attempting to stabilize after three months of weakness. The compression of price within a defined structure, paired with bottoming momentum indicators, implies that longer-term participants are reassessing risk and preparing for possible yield re-expansion.

Key Technical Levels to Watch

  • Support Zone (Weekly and Monthly): 4.10%–4.00%
    This region has acted as a pivot for the past six months and has again proven resilient. A breakdown below this zone would shift momentum to the downside and risk a move toward 3.80%.

  • Immediate Resistance (Weekly): 4.45%
    This is the upper bound of the short-term consolidation. A weekly close above 4.45% would likely open room for a re-test of 4.65%.

  • Major Resistance (Monthly): 4.65%–4.70%
    A breakout above this zone would represent a significant shift in the yield environment and could trigger re-pricing across various asset classes.

  • Long-term Range Boundaries: 3.80% – 4.65%
    This range remains the dominant structure across both timeframes and should be treated as the main map for directional bias.

Supplementary Context: Powell’s Remarks Reiterate a Data-Dependent Approach

In his April 16 speech at the Economic Club of Chicago, Fed Chair Jerome Powell reiterated the Federal Reserve’s wait-and-see stance regarding policy adjustments. While acknowledging inflation risks, he emphasized the importance of awaiting clearer economic signals before taking further action. Powell noted that despite recent financial market volatility, current conditions do not warrant immediate intervention from the central bank.

He stated that both the labor market and overall economic conditions remain solid, even as Q1 growth is expected to slow. Importantly, Powell distanced himself from any notion of a “Fed put,” clarifying that market volatility alone will not drive policy changes. From a technical perspective, this reinforces the idea that the bond market will likely continue to operate in a range-bound environment unless disrupted by significant macroeconomic data surprises.

However, these remarks serve only as a backdrop; the current yield movements are better understood through the lens of price structure and momentum dynamics rather than macro sentiment.

Conclusion: Recovery in Motion, but Confirmation Needed

The US 10-Year Treasury Yield is at a critical juncture. Weekly and monthly chart structures suggest that the yield is in the early stages of a bullish recovery following a failed breakdown and technical stabilization. Both timeframes point to waning bearish momentum and the potential for a re-test of upper range boundaries in the coming weeks.

However, confirmation through continued price follow-through and a breakout above key resistance levels will be essential. For now, traders and long-term investors alike may view the current environment as one of consolidation with upside bias — contingent on the yield’s ability to overcome structural hurdles at 4.45% and 4.65%.

The coming weeks will determine whether this early recovery will translate into a full-fledged trend reversal or remain contained within the bounds of an extended range. Until then, technical discipline remains paramount.


Disclaimer:
The content of this article is intended for informational and educational purposes only and should not be construed as financial or investment advice. All analysis is based on historical price action and publicly available data at the time of writing. Market conditions are subject to change, and past performance is not indicative of future results. Readers are encouraged to conduct their own research or consult with a qualified financial advisor before making any investment decisions. The author and publisher disclaim any liability for financial losses or other damages that may result from the use of information contained herein.


Enjoyed this article?
Take your trading further with exclusive premium content, including stock picks, fundamental analysis, and DCF valuations — available to purchase individually.
👉 Darrisman's – Access the full content now!


Other related post

Mixed US Data Adds Slight Dovish Tilt Ahead of Powell Speech and Fed Policy Outlook

IEA Slashes Oil Demand Forecast Ahead of Key EIA Report: What It Means for Markets and Policy

Cooling Prices and Subdued Factory Activity Support a Dovish Fed Policy Path

Comments

Post a Comment