10Y note
Weekly 10Y note keeps previous historical high level at 130. Having up rally from obvious support level at 128 asset remain in a potential down trend which marked on the picture. However this down trend is just about correction to a major up trend which started at the beginning of this year. However, I don’t see any obvious supply coming in asset, despite up trend deterioration since August 2011 and present potential down trend started since September. To me, strong up rally from October 28th is a good sign that buyers keep the situation under control. From the other point of view, after that strong up rally I prefer to see new high instead trading range. So, last local trading range and last week close which was kept almost at the same level as previous close let me have a bit doubt that buyers enough strong. I don’t think that it’s a good time to open long because of the price position and high risk/reward ratio. I prefer to have more obvious situation. I don’t think about short position since I haven’t got evidence that supply overcome demand.
Daily situation looks more boring due to a mentioned local trading range at 130 level. I assume, that demand absorb supply because asset keeps price close to the selling zone. In any way, I remain myself aside in this situation.
In order to open long position I would like to have strong up rally above selling zone marked on the picture red and later on a correction without much power of supply and acceptable risk reward ratio.
U.S. Dollar Index (DXY).
Weekly situation looks like asset making new up trend, which become obvious if asset is going to test 82 level. Last week closed strong up at the previous selling zone where supply entered in October. I think that it quite normal to wait 81-82 zone test. Otherwise current level is an important one in the situation.
Daily up trend, which started at the end of October, have been accelerating since November 24 and bring price in a local overbought stage which occurs in selling zone marked red on the picture. It’s too late and dangerous to buy due to the overbought stage and selling zone and too early and too dangerous to short due to the last up trend acceleration. I am looking for a situation where it become obvious that demand absorbs supply here in order to open long position. Short side position need to have an evidence that supply is getting in.
