Citi: Stocks, Bonds, Gold, & JPY Levels To Watch

Tyler Durden's picture

The 10Y yield closed below its 200-day moving average and should test down to 2.47% in the short-term; and Citi's FX Technicals believes the Dow will test its 55-week moving average at 15,214, S&P 500 at 1,707; and Gold's consolidation/correction is over - the uptrend has resumed.

 

Via Citi FX Technicals,

US 10Y yield: Closed below the 200 day moving average and should test 2.47% in the short term

US 30Y yield: Met the initial target at 3.56%. We need to wait for further developments before confirming additional breaks on the weekly chart

Dow Industrials: Closed below the 200 day moving average for the first time since late 2012 and is likely to test the 55 week moving average in the near term at 15,214.

S&P 500: Likely to continue lower towards the 200 day moving average at 1,707.

USDJPY: Breached support levels in the 101.50 area and should test the 200 day moving average at 100.09. Support levels below there are just below 99.00.

Nikkei 225: The next support area is 13,799-918 which needs to be watched on a weekly close basis. The overlay with USDJPY suggests the pair should probably be trading around 99.00 now.

Gold: The morning star pattern on the daily chart and hold of the 55 day moving average tells us the consolidation / correction down is over and the uptrend has resumed.+

US 10 year yield – closed below the 200 day moving average

The close below the 200 day moving average opens the way for a move to the double top neckline at 2.47%

Decent support levels come in just below there at 2.39%-2.41% which would have to be watched on a weekly close basis before confirming any medium term break (and in conjunction with US 30 year yields)

For now a test of 2.47% is expected in the short term

US 30 year yield – initial target met

The initial target of 3.56% which was the double top neckline has been met. Additional supports come in just below at 3.48%-3.49%

While there is a danger of lower yields still (following the monthly reversal seen in January), we would need to see a weekly close below 3.48% and weekly closed below the support levels on US 10 year yields at 2.39% before confirming another break.

Dow Jones Industrial average daily and weekly charts

Left chart: Closed below the 200 day moving average for the first time since late 2012

Right chart: Focus now turns to the 55 week moving average at 15,214. That is likely to be tested in the near term. A weekly close below there, if also seen on the S&P 500 (where the 55 week moving average comes in at 1,672) would amount to a more important medium term bearish break.

S&P 500 – likely to test the 200 day moving average

In the shorter term, the S&P 500 is still at risk of posting further losses down to 1,707 (200 day moving average) and parallel of the trend across the highs.

USDJPY – likely to test the 200 day moving average

Support levels at 101.53-102.12 have given way on a daily close basis

This now opens the way for a move to the 200 day moving average at 100.09

The weekly chart below highlights additional levels and the overlay with the Nikkei 225 highlights the danger of further losses on USDJPY...

USDJPY Weekly Chart

The 55 week moving average and parallel of the trend across the highs converge at 98.33-85

Only a weekly close below there would warrant serious concern over a more medium term horizon.

Nikkei 225 and USDJPY overlay – should USDJPY be lower? - watch the 55 week moving average

The weakness in the Nikkei 225 (which closed below the 200 day moving average today) would suggest USDJPY should be trading around 99.00

The next set of decent supports on the Nikkei 225 are at 13,799-918 where the 55 week moving average and parallel of the trend across the highs converge

We would need to see a weekly close below those levels before confirming any further bearish breaks

Gold – uptrend has likely resumed after consolidation

The negative divergence seen last week has now been unwound after the brief pullback / consolidation

Gold has remained above the 55 day moving average support at $1,235 and has posted a morning star like pattern on the daily candles

This now suggests the uptrend is ready to resume and higher highs are likely

As a reminder, the weekly chart showed another bullish outside week two weeks ago...

A rally above last week’s high at $1,279 opens the way for a move to $1,361-77 and then the more medium term double bottom neckline at $1,433.