Key Reversal Day in ZN
The 10yr notes market made a big reversal today following the CPI data. And this move could continue following the US retail sales tomorrow as economists are expecting a downtick in US consumer spending. We are far from a reversal, but given the big "outside day" bullish reversal candle near key long term support near the 109'00 level, we could see a much bigger reversal unfold in the market.
Two days ago, the chart of the day was the USDCNH and the correlation of yields in the 10/30yr markets. If the above holds true, we could see a reversal lower in the USDCNH and perhaps the broad US Dollar market as well.
To be extra sure that a key reversal is developing, we would be looking for a move back above the 50dma which capped the rally on Friday, September 1st.
Two days ago, the chart of the day was the USDCNH and the correlation of yields in the 10/30yr markets. If the above holds true, we could see a reversal lower in the USDCNH and perhaps the broad US Dollar market as well.
To be extra sure that a key reversal is developing, we would be looking for a move back above the 50dma which capped the rally on Friday, September 1st.