Aussie 10-Year Yield at 3.5% Signals Rally on Fibonacci

Australia’s 10-year yield may draw demand as it climbs toward 3.52 percent, according to National Australia Bank Ltd., citing trading patterns.

A Fibonacci graph shows the level is a 50 percent retracement of a decline from this year’s high of 4.345 percent on March 20 to a record low of 2.698 on June 4.

The rate was as high as 3.38 percent yesterday, rising through the previous Fibonacci level marking 38.2 percent of the retracement. According to Fibonacci analysis, clearing one hurdle opens the way for a move to the next.

“Yields could push higher,” said Peter Jolly, the Sydney-based head of market research for National Australia, the nation’s biggest bank by assets. “Buyers will come back in as we get above 3 1/2 percent.”

Ten-year note yields ended yesterday at 3.32 percent.

The next Fibonacci level after 3.52 percent is 3.72 percent. The analysis is based on a series of numbers developed by 13th-century mathematician Leonardo da Pisa, known as Fibonacci. Analysts use the numbers to determine levels where buy and sell orders may be clustered.

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