US 10Y TREASURY: 4,2% is broken, pending confirmation
The 10Y US Treasuries were testing the 4,2% level since September 2025, while this level was finally and strongly broken to the upside on Friday. The 10Y yields closed the week at 4,231%. Why is this event so important at this moment, when the market is talking about Fed rate cuts? The thing is that the Fed can impact short term rates, but investors are determining what returns they want for holding US Treasury bonds for the long term period. This is sort of market communication which is noting its expectations over sustained inflationary pressures, which could keep borrowing costs elevated and limit the scope for future Fed rate reductions. For investors, this implies a cautious stance on bonds and potential pressure on rate-sensitive assets like gold and long-duration equities.
From a technical analysis perspective, this breach indicates that the 4,2% will become the new supporting level and that further moves of 10Y yields could only be to the upside. As per charts, the next resistance level lies somewhere around 4,3% - 4,35% levels. Current geopolitical and political situations must be taken into account. Markets are not happy with uncertainties, so the current talks regarding US takeover of Greenland, and not contributing to a better US economic outlook. Also, the DOJ probe on Fed Chair Powell is also something that is not making markets happy, so they will naturally contract, until the view for the future looks better.
For the week ahead, now that the 4,2% is broken, this level will be tested again, in which sense, the breakout will be confirmed. If the 4,2% is confirmed, this will become the new supporting level for 10Y Treasury yields. In case that yields pull back below the 4,2%, then yields will search back levels around 4,1%-4,15%, but at this moment, there