10-Yr U.S. Treasury Notes (TY) Futures Technical Analysis – October 27, 2014 Forecast

December 10-Year U.S. Treasury Notes posted an inside day on Friday, but the close near the low suggests there may be an early downside bias on Monday. The tight ranges the past several days suggests a little trader indecisiveness. This type of trading could continue this week until Wednesday’s release of the latest Fed monetary policy statement.

The main range is 123’16 to 130’17. Its retracement zone is 127’00.5 to 126’06. The 50% or upper level at 126’31 is currently being tested. If this price fails then look for a drive into a pair of uptrending angles at 126’26 and 126’24.  

Breaking these support angles could put the market on the weak side of a steep downtrending angle at 126’17. This will open up the market for a potential test of the Fibonacci level at 126’06.

On the upside, holding the 50% level at 127’00.5 will be a sign that buyers are coming in to defend the uptrend. This shouldn’t be a surprise since the main trend is up and the market is testing a key retracement zone.

If buyers can sustain a move over 127’00.5 then look for the start of a retracement to the upside. Over the near-term, there should be a move into at least 50% of the break from the 130’17 top.

The tone of the day will be determined by trader reaction to the 50% level at 127’00.5. This price could act like a pivot with the market straddling this level several times before traders decide which way they want to take it.