The US Treasury yields have rebounded, with longer-term yields increasing throughout the day. The 5-year yield rose by 0.2 basis points, the 10-year yield by 1.2 basis points, and the 30-year yield by 3.2 basis points. The U.S. Treasury is set to auction 30-year bonds to complete their coupon auctions for the week, following a disappointing 10-year note auction with low demand.
The rise in yields has caused the US dollar to strengthen against major currencies like the EUR, GBP, and CAD, while also nearing highs against the JPY. The EURUSD broke below key support levels and aims for the 2024 low, potentially falling further towards 1.0655-1.0675. Meanwhile, the GBPUSD hit a new low for the year after falling below key levels from previous months, with the next target at 1.2499. The USDCAD also climbed to new highs above 1.3700, with buyers pushing price above a topside trend line towards the 1.37346-1.3766 target area.
Overall, the rebound in US Treasury yields has sparked a rally in the US dollar, as investors react to the auction results and shifting market dynamics. The strength of the US dollar against other major currencies reflects market sentiment and expectations for economic growth, while technical levels on currency pairs like EURUSD, GBPUSD, and USDCAD suggest potential further movements based on recent price action and key support levels being breached. Traders will continue to monitor Treasury yields and currency movements for further insights into market trends and potential trading opportunities.
