US 10-Year Treasury Yields Test Key Technical Area: Resistance And Support Levels To Watch Next

Yields on the 10-year Treasury bonds have climbed in recent weeks, approaching a technical zone marked by significant resistance and support levels that may dictate the future trends in U.S. bond rates.

Short-term bullish momentum has pushed yields to their highest point since mid-March 2023 and they surpassed the hurdle of the 200-day moving average (dma) this week, invalidating the breakdown that occurred earlier this month.

Yields sought to hit the important 50dma on Wednesday, where some bearish resistance reappeared.

Chart: TradingView

The following are the important resistance/support levels to keep an eye on next for the 10-year Treasury yield:

• R1: 3.65%-3.67%. The nearest resistance is at 3.65% and corresponds to the 50dma. The 10-year yield in the U.S. has been trading below the 50dma since mid-March. Not far from there, there is another key hurdle represented by the 50% retracement of the March/April high-to-low range. 
• R2: 3.77%. It marks a 61.8% retracement of the above range.
• R3: 3.91%. It represents a 78.6% retracement as well as a full reversal of the post-banking crisis move. 
• S1: 3.53% (200-day moving average)
• S2: 3.45%. A pullback to the 23.6% retracement level. 
• S3: 3.25%. Lows of April 6. 

ETF Strategies On The 10-Year U.S. Yields

If an investor expects yields to go up, the iShares 7-10 Treasury Bond ETF (ARCA: IEF) will likely go down in value.

Alternatively, when yields trend lower, the iShares 7-10 Treasury Bond ETF typically gains in price.

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