Despite the volatility the US30 remains range-bound
Hi traders, well one sure thing lately has been volatility, the US30 has seen some big one day sessions over the last several weeks with the trade war and bond yields being key driving factors, interest rates played a key role but of late look to have died down.
Overnight the US30 moved lower after key yield curves inverted moving to its worst level since 2007. The chart below shows the currect situation. Long-term treasury rates added to their monthlong slide Tuesday, aggravating a key yield curve inversion and sending the 10-year yield to its lowest level against the 2-year rate since 2007- CNBC
Looking at the daily US30 chart we can see very clearly the indecision in a very wide range that has formed. The range width is 1150 points, this is a real indicator of the current tug of war US30 traders are caught up in. Price has also started to form a triangle that could end up becoming an ending diagonal, these can be reversal patterns but its far from complete, let alone confirmed! For now key resistance remains at the top of the range that also lines up with a previous low. (level 26,450). Buyers for have been strongly defending 25,400, this level has become the range base.
While there’s most likely been some excellent short-term moves for traders to chase in the US30 range, sooner or later we will see a breakout. The big question is, will it be a continuation moving lower after the trend break? or is this a wide accumulation that could set up a new extension higher? Fundamental factors like the current trade negotiations and bond yields should continue to play a part and should continued to be monitored. With price mid-range at the moment its a waiting game to see how it reacts at the next top or bottom test.