March U.S. Treasury Bond futures at the Chicago Board of Trade have seen a decent short-covering rebound from the January low of 109 6/32, which is now solid technical support. However, T-Bond prices are still in a two-month-old downtrend from the early-December high of 114 30/32. It will take a solid push above trend-line resistance at the 111 even area, basis March futures, to penetrate on the upside the downtrend line on the daily bar chart, and to begin to suggest prices can begin to work back higher.
The bulls are a bit encouraged by the fact that the Moving Average Convergence Divergence (MACD) indicator overlaid on the daily chart has just recently produced a bullish line crossover signal, whereby the MACD line crossed above the “trigger” line of the indicator. The last bullish MACD line crossover signal occurred in late November, and March bonds did then rally strongly into the early-December high.
The bond market bears would gain fresh downside technical power, to suggest a fresh leg down in prices, by pushing March T-Bond futures prices back below strong technical support at the January low of 109 6/32. Near-term technical resistance for March T-Bonds is located at 110 16/32 and then at last week’s high of 110 27/32. Near-term chart support is seen at 110 even and then at 109 28/32.
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