After nearing the highs for the year earlier this week, 10-year Treasury yields have come down a fair bit. The move lower was helped by a more dovish Fed yesterday, with the rebound last week now resembling a double-top pattern. But as yields retreat, they are nearing a key technical juncture on the chart as well.
Yields are now at 4.229% and are nearing the confluence of its 100-day (purple line) and 200-day (green line) moving averages at 4.204% to 4.220%.
A fall below that will see bond buyers seize back control with yields potentially slipping back to the March lows near 4.09%. But if yields hold above the key technical region, that might keep dollar selling more limited for the time being.
So far today, the drop in yields isn't weighing on the dollar all too much. The greenback was softer in Asia trading but has recovered some decent ground so far in Europe.
USD/JPY is a good example of that, now trading near 151.00 after having hit a low of 150.26 earlier in the day. It is off earlier highs just a few hours ago at 151.45 though as yields start to retreat further now.
