TBOND breaks below key technical support level
U.S. Treasury Bond (TBOND) Technical Analysis Report for Aug 07, 2020 | by Techniquant Editorial Team
TBOND ended the week -0.48% lower at 181.562 after losing $0.719 (-0.39%) today on high volume. Trading $0.531 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on July 27th, TBOND actually gained 0.57% on the following trading day. Closing below Thursday's low at 181.719, T-Bond confirmed its breakout through the previous session low after trading up to $0.313 below it intraday.
Daily Candlestick Chart (TBOND as at Aug 07, 2020):
Friday's trading range has been $1.406 (0.77%), that's far above the last trading month's daily average range of $1.120. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for TBOND.
Regardless of a strong opening the contract closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 181.938 (now R1), which is likely to act as resistance going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might speed up should prices move below the close-by swing low at 181.281 where further sell stops could get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for T-Bond. Out of 563 times, TBOND closed higher 57.02% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 57.90% with an average market move of 0.39%.
With four out of the other four Bond Markets closing lower today, the ones that stand out on the negative side are TNOTE10Y losing -0.13% and BUND closing -0.1% lower. None of the markets managed to end the day in the green. Read more