US10Y Technical Analysis & Mortgage Rate Outlook Weekly. Aug. 4
US10Y Technical Analysis & Mortgage Rate Outlook
(Based on Weekly Chart & Current Economic Context)
Technical View (Weekly Timeframe)
The US10Y yield is sitting around 4.21%, in the middle of a wide consolidation range that’s been developing since late 2023. This range is bounded by strong resistance near 4.62%–4.80% (purple supply zone) and support near 3.86%–4.00%.
* Trend Structure:
* We are still in a macro uptrend from the 2020 lows, but recent action has been sideways-to-lower since late 2023.
* Yields remain above the long-term uptrend line but have failed to sustain breakouts above 4.80% multiple times — showing sellers are defending that zone heavily.
* Support Levels:
* 4.00%–4.10% → First key demand zone.
* 3.86% → Major floor; losing this could trigger a larger downside move toward 3.50%–3.60%.
* Resistance Levels:
* 4.50% → First overhead supply.
* 4.62%–4.80% → Strong long-term resistance. A breakout here could signal a push toward 5.0%+ yields.
Economic & Labor Market Context
The latest labor market report showed slowing job growth but still relatively low unemployment. Wage pressures have eased slightly, hinting that labor-driven inflation is cooling. However:
* Inflation remains above the Fed’s 2% target, making the central bank reluctant to cut rates aggressively.
* The bond market is pricing in fewer rate cuts in 2025 than previously expected, keeping yields elevated.
* The Fed’s tone remains “higher for longer” until inflation shows more decisive softening.
Mortgage Rate Implications
Mortgage rates tend to follow the 10-year Treasury yield plus a spread of roughly 1.8%–2.0%.
* If 10Y Stays Near 4.20% → 30-year fixed mortgage rates likely hover around 6.0%–6.2%.
* If 10Y Tests 4.80% Resistance → Mortgage rates could climb toward 6.8%–7.0%.
* If 10Y Breaks Below 4.0% → Mortgage rates could fall into the 5.8%–5.9% range.
Given the Fed’s cautious stance and sticky inflation, a sustained drop below 6% mortgage rates in the near term looks unlikely unless we get a meaningful deterioration in economic growth.
My Thoughts
* Short-term (1–2 months): Likely range-bound between 4.0% and 4.62% until a major macro catalyst (CPI, Fed policy shift) forces a breakout.
* Medium-term (3–6 months): If economic data continues to soften, yields could drift toward 4.0% and help mortgage rates ease modestly. If data surprises to the upside, a retest of 4.80% is likely.
* Mortgage Rate Forecast: Expect 30-year fixed rates to stay between 6.0% and 6.6% for the rest of summer, with downside limited unless the Fed signals an earlier pivot.
(Based on Weekly Chart & Current Economic Context)
Technical View (Weekly Timeframe)
The US10Y yield is sitting around 4.21%, in the middle of a wide consolidation range that’s been developing since late 2023. This range is bounded by strong resistance near 4.62%–4.80% (purple supply zone) and support near 3.86%–4.00%.
* Trend Structure:
* We are still in a macro uptrend from the 2020 lows, but recent action has been sideways-to-lower since late 2023.
* Yields remain above the long-term uptrend line but have failed to sustain breakouts above 4.80% multiple times — showing sellers are defending that zone heavily.
* Support Levels:
* 4.00%–4.10% → First key demand zone.
* 3.86% → Major floor; losing this could trigger a larger downside move toward 3.50%–3.60%.
* Resistance Levels:
* 4.50% → First overhead supply.
* 4.62%–4.80% → Strong long-term resistance. A breakout here could signal a push toward 5.0%+ yields.
Economic & Labor Market Context
The latest labor market report showed slowing job growth but still relatively low unemployment. Wage pressures have eased slightly, hinting that labor-driven inflation is cooling. However:
* Inflation remains above the Fed’s 2% target, making the central bank reluctant to cut rates aggressively.
* The bond market is pricing in fewer rate cuts in 2025 than previously expected, keeping yields elevated.
* The Fed’s tone remains “higher for longer” until inflation shows more decisive softening.
Mortgage Rate Implications
Mortgage rates tend to follow the 10-year Treasury yield plus a spread of roughly 1.8%–2.0%.
* If 10Y Stays Near 4.20% → 30-year fixed mortgage rates likely hover around 6.0%–6.2%.
* If 10Y Tests 4.80% Resistance → Mortgage rates could climb toward 6.8%–7.0%.
* If 10Y Breaks Below 4.0% → Mortgage rates could fall into the 5.8%–5.9% range.
Given the Fed’s cautious stance and sticky inflation, a sustained drop below 6% mortgage rates in the near term looks unlikely unless we get a meaningful deterioration in economic growth.
My Thoughts
* Short-term (1–2 months): Likely range-bound between 4.0% and 4.62% until a major macro catalyst (CPI, Fed policy shift) forces a breakout.
* Medium-term (3–6 months): If economic data continues to soften, yields could drift toward 4.0% and help mortgage rates ease modestly. If data surprises to the upside, a retest of 4.80% is likely.
* Mortgage Rate Forecast: Expect 30-year fixed rates to stay between 6.0% and 6.6% for the rest of summer, with downside limited unless the Fed signals an earlier pivot.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.