Chart of the day - TNOTE (16.08.2024)

Treasury bonds (TNOTE), following yesterday's retail sales report, are testing the key level of 113.0000 points. However, with the approaching monetary easing by the Fed, the overall trend remains upward in the longer term.

TNOTE saw a local low at the end of 2023, and it is unlikely that it will return to those levels in the near term. Interest rate cuts in the U.S. by the end of this year are more or less a certainty, and investors' bets are more focused on the scale of these easing. In April of this year, we experienced another declines, driven by higher-than-expected CPI readings and the Fed's hawkish stance. At that time, TNOTE formed a double-bottom pattern, with the second bottom slightly higher than the low at the end of 2023. Since then, the quotations have been steadily climbing, creating strong support levels at 109.0000 and 111.0000 points, respectively.

Currently, TNOTE is testing support at the 113.0000 level following the release of yesterday's retail sales data. The 111-113 point range should serve as a strong support level for further gains, assuming the Fed begins a rate-cutting cycle at the September meeting.

Source: xStation 5