The U.S. 10-Year Treasury Yield chart exhibits a potential topping pattern, characterized by a completed impulsive wave structure. Last week’s CPI data, signaling a cooling inflationary environment, may serve as a catalyst for this perceived top, hinting that a less aggressive rate hike path could be on the horizon. Nonetheless, a decline in yields is unlikely to occur in a straight line—pullbacks are to be expected, with an a-b-c rise potentially materializing as the first five waves down seem to be concluding. As such, it might be premature to initiate dollar shorts; however, these could become compelling once U.S. yields hit resistance levels. Contributing to a short-term USD rally is the Thanksgiving holiday, which typically influences FX flows, creating a prime period for retracement on dollar pairs. Ultimately, when U.S. yields are poised to continue their descent, that’s when new opportunities for dollar shorts could emerge.
Grega
