Nov 2 (Reuters) - A closely watched US interest rate has fallen for four weeks, promising some relief for borrowers across the economy. But it is too soon to say the rising trend that began with the Iran war is over, technical analysis indicates.
Technical analysts use charts of past price moves to map where a market might go next. In doing so, they look for support, which is a level that may act as a floor for the yield in a falling market. They also look for resistance, which is a level that could cap a rise. Yield is the return an investor earns on a bond, and the 10-year US Treasury yield influences borrowing costs for mortgages, businesses and governments.
The 10-year yield climbed to a 24-year high of 5.3645% on October 7, up from 3.9620% just before the war began. After retreating from that October 7 peak, it remains above the rising 20-week moving average, which sits near 4.81%, according to data supplied by LSEG.
A moving average smooths out extremes by averaging the yield over a set period. Because it updates continually, it rises and falls with the market. The 20-week average has been a key support level throughout 2026, halting pullbacks several times. Analysts are therefore unlikely to view the recent slide as durable until the yield breaks below that average and stays there.
If it does, the yield could head toward more support in the 4.75% to 4.68% area, then around 4.62%. More significant targets may emerge at 4.50% to 4.40%. That zone is the upper edge of a chart pattern known as a symmetrical triangle, which is formed by two diagonal lines linking key highs and lows that converge. Chart patterns often act as support or resistance. The zone also includes the 20-month moving average, which is the same measure over a much longer period.
If the yield instead starts rising again, analysts will watch the upper yearly Bollinger Band which ended October near 5.07%. Bollinger Bands are lines drawn above and below a moving average to gauge volatility, or how sharply prices swing. They can also become support or resistance.
Beyond that, resistance comes in around 5.16% to 5.18%, followed by the October 7 peak. A move above that high would put the 5.48% to 5.52% range in focus, followed by the 50-year moving average near 5.65%. A rise above 6% would bring 6.24% into view.
That level corresponds to a Fibonacci retracement of the 1981-to-2020 decline in yields. Fibonacci retracements are mathematical calculations that mark the percentages a market often revisits after a big move.
What the chart shows:
The 10-year yield has pulled back from a 24-year high of 5.3645%
A sustained break below 4.81% could open the way to 4.75% to 4.68%, 4.62% and then 4.50% to 4.40%
A renewed rise would meet resistance at around 5.07% and 5.16% to 5.18%, then 5.3645% and 5.48% to 5.52%
(Mapping the Market is a daily column written by Reuters journalists. The commentary is based on a technical analysis of financial charts, which helps assess the likelihood of future price moves but does not guarantee the outcome. The column does not constitute investment advice or trading recommendations. )
Terence Gabriel is a Reuters market analyst. The views expressed are his own. Editing by Burton Frierson and David Gaffen
