US 10-year treasury yield recovers from 5-week lows

Treasury yields recovered from the 5-week lows on Tuesday after the data released in the US showed the trade gap with narrowed sharply by 26.6% from January, while the overall deficit dropped as the exports hit two-year high.

The 10-year treasury yield hit a low of 2.314% yesterday before recovering to 2.36%.

Double top reversal

The weekly chart of the 10-year treasury yield shows a double top formation (at 2.63%-2.64%) with the neckline support at 2.31%. A break lower on Tuesday would have marked an end of the Trumpflation trade.

The risk of a bearish break below 2.31% is high if the Trump-Xi meeting ends on a bad note. On the other hand, the yield may witness a revival if the Fed minutes talk about the reduction in the balance sheet size.