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Treasury Yields May Rise to One-Year High: Technical Analysis

Treasury 10-year yields may climb to a one-year high after their 200-day moving average bottomed out, CIBC World Markets Japan Inc. said.

The 200-day moving average leveled off at about 1.71 percent after falling from a high of 3.17 percent in August 2011. The yields have been above the moving average since Jan. 3 and were at 1.91 percent as of 10:58 a.m. in Tokyo. Yields may hover around 2 percent in the next six months before advancing, said Kazuaki Oh’e, a bond salesman in Tokyo at the unit of Canada’s fifth-largest lender

“A resistance line will be the 2.3 percent level reached April 4,” 2012, he said. “Once yields rebound to that level, we’re likely to see them rise to about 2.4 percent by year- end.”

That would be the highest since March 20 last year. Should his projection turn out to be correct, investors who buy 10-year notes today would lose 2.5 percent, according to data compiled by Bloomberg.

In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.

To contact the reporters on this story: Yumi Ikeda in Tokyo at yikeda4@bloomberg.net; Masaki Kondo in Singapore at mkondo3@bloomberg.net

To contact the editors responsible for this story: Yoshito Okubo at yokubo1@bloomberg.net; Rocky Swift at rswift5@bloomberg.net

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