U.S. Yields Appear ‘Toppy’ – Expect a Downtrend to be ‘Bumpy’Nov 22, 2023

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.


Elliott wave us yields chart


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