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Draw Bid Post-Dallas Fed MFG Index

US TSY FUTURES
  • After paring support over the last half hour, front month Treasury futures rebound after April Dallas Fed manufacturing index comes out much weaker than expected -23.4 vs. -12.0 est. June 10Y futures +10 at 114-25 (114-26.5 high).
  • Despite the rebound today, 10Y futures remain vulnerable and recent activity appears to be a bear flag - a bearish continuation pattern that reinforces the current downtrend. The contract has recently traded through the 20- and 50-day EMAs and pierced 114-00. The move lower opens 113-23, a Fibonacci retracement.
  • On the upside, initial firm resistance is at 115-00, Friday’s high. A break and close above this level would ease the current bearish threat.

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