Following Monday’s action though, notable technical developments occurred on the charts of the US Treasury 10-Year Yield Index (TNX) and iShares Barclays 7-10 Year Treasury Bond ETF (IEF).

Tuesday marked the first day of semi-annual testimony in front of Congress from Fed Chair Powell, along with additional Fed speakers to follow. With mounting pressure from President Trump and even a couple of Fed Presidents noting that recent inflation prints could set groundwork for a rate cut at the next July meeting, the fixed income market isn’t for a lack of things to watch in the coming weeks.

Following Monday’s action though, notable technical developments occurred on the charts of the US Treasury 10-Year Yield Index (TNX) and iShares Barclays 7-10 Year Treasury Bond ETF (IEF). The TNX chart fell below 43.00 (4.3%) to return to a sell signal after having been on a buy signal since the latter part of May. This action brings the TNX down to test the bullish support line, setting up a potential trend change– possibly the eighth in a 24-month span. The shifting trend changes in recent years highlight the consolidation of interest rates with recent action appearing to bring rates to an inflection point in the mid to low 4% range.

Meanwhile, the IEF chart shifted back into a positive trend following Monday’s action – marking the eighth trend change in 24 months on the default chart - after having been in a negative trend since mid-April. This follows the fund giving consecutive buy signals after a retest of the April chart lows in the latter part of May.

Along with the trend change on the default chart of IEF, the trend flip coupled with the fund moving above the 200-day moving average during Monday’s trading brought the ETF’s fund score back above 1. While only slight, it does give the ETF a positive score direction based on trending improvement, but like the TNX chart above, the long-term picture for the fund has shown consolidation within the lower to upper $90s.  

The relative strength picture continues to be negative relative to the market, equity-related assets, and commodities, and what leadership there is within the broader Fixed Income asset class remains narrow. Given the bevy of Fed speakers this week though, investors will closely watch for additional signs of near-term improvement or a negation of the recent positive developments.