U.S. T-Bond futures test key support

U.S. T-Bond futures are testing an important tactical support zone at the May–September triangle base breakout near 116-07 to 116-03. A brief undercut to 115-24 found secondary support at the rising 26- and 40-day moving averages (115-31 and 115-20), with a rebound off this zone. If T-Bonds hold this deep test of support, it would confirm the breakout and set up upside potential beyond recent highs at 118-06 and 118-21, with triangle pattern counts projecting toward 120-08 and 121-14.

Chart 1: U.S. Treasury Bond futures

Below is another look at T-Bond futures with retracement levels for the 9/3 to 9/17 rally. T-Bonds tested and held the 50% retracement at 115-27. While we are encouraged by the rebound from the session low at 115-24, the 61.8% level comes in near 115-05 in case a deeper undercut occurs.

Chart 2: U.S. Treasury Bond Futures