Treasury Yield Curve Flattening May Hasten After Support Breaks

  • Steepening trend line in two-, 10-year yield spread gives way
  • Charts point to support at Fibonacci convergence zone

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The flattening of the U.S. yield curve may accelerate, technical patterns on the chart suggest.

The difference between two- and 10-year yields may approach 113 basis points, a Fibonacci confluence zone, after the curve broke down below the four-month steepening trend line and the 21-day moving average at 125-124 basis points.

The 100-day moving-average lurks just below at 112 basis points. Any steepening beyond 129 basis points would question the near-term flattening risks.

NOTE: Sejul Gokal is a technical strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.

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