10-Yr U.S. Treasury Notes (TY) Futures Technical Analysis – October 28, 2014 Forecast

After successfully testing a pair of uptrending angles inside a major retracement zone, the December 10-year U.S. Treasury Notes formed a potentially bullish closing price reversal bottom. A trade through 127’08 will confirm the reversal. This could fuel the start of a 2 to 3 day retracement back to 128’21.5 to 129’03.5.

The main range is 123’16 to 130’17. Its retracement zone is 127’00.5 to 126’06. A pair of uptrending angles from previous bottoms passes through this zone at 126’30 and 126’28. Monday’s closing price reversal bottom at 126’25.5 fell inside the zone and on the angles.

The daily chart indicates there is plenty of room to the upside with the first target a steep downtrending angle at 128’09, followed by the retracement zone at 128’21.5 to 129’03.5.

The set-up is there for a rally to begin. The key will be taking out 127’08 with conviction. If 126’25.5 fails as support then look for the selling to continue into the Fibonacci level at 126’06.

The tone of the market today will be determined by trader reaction to 127’08.