Treasury ETFs: Bullish setups for TLT and IEI

US Treasuries are on the move, and the iShares 20+ Year Treasury Bond ETF (TLT) is positioned to break higher from a year-long bullish falling wedge pattern. A decisive rally above 88.45 would confirm this bullish setup and favor more upside for TLT, with the potential to test the beginning of the wedge at 101.64. In addition, completing this wedge would increase the potential for a double bottom from the late 2023 and early 2025 lows, which are key supports from 83.30 to 82.42.

This pattern is similar to the rising wedge that sets up the potential for a lower U.S. 30-year Treasury Yield, which we highlighted in our August 11 Chart Market Insights report.

The iShares 3-7 Year Treasury Bond ETF (IEI) has broken out from a tactical bullish triangle and has the potential to complete a 2022-2025 big base. Clearing 120.10-120.33 (the 38.2% retracement of the 2020 to 2023 decline and chart resistance) would likely confirm this bullish pattern for further upside to the 50% and 61.8% retracements at 122.78 and 125.45, respectively. The tactical triangle breakout remains solidly in place above 119.00-118.70.