US yields are pushing higher again as strong US data keeps expectations for more Fed tightening alive, supporting the dollar and weighing on stocks. The US-China meeting is in focus today, with trade, tariffs, rare earths and technology likely key topics. Oil is seeing some rebound after the recent sharp pullback, but there is no major new escalation in the Middle East so far. For now, higher yields and a stronger dollar remain the main drivers across markets.
Looking at the US 10-year Treasury note, we see price broke to the downside, and it looks like we are now in wave five of an extended wave three decline. More importantly, the market broke out of a triangle, and we know that moves out of triangles are often final legs within a higher-degree impulsive sequence. So some stabilization could show up soon, but ideally only for a wave four recovery before another decline in bonds pushes US yields even higher.
This also suggests that the US dollar can remain in an uptrend after some corrective pullbacks. In fact, this makes sense when we look at the Dollar Index on the 4-hour time frame, where price is also trading in wave five and potentially moving into the late stages of the recovery from the September lows. Resistance is around 101, while much more important support on a pullback would be around 100.00–100.50.
But the right side remains bullish for the dollar, but we should now be aware of some near-term slowdown.
Trade well,
Grega
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