30-Yr U.S. Treasury Bonds (US) Futures Analysis – June 17, 2013

September 30-Year Treasury Bond futures are trading higher on Monday amid speculation the U.S. Federal Reserve will stay the course and leave its current $85 billion a month bond-buying spree unchanged at its next meeting on June 19.

Since May 1, investors have been driving Treasury Bonds lower in anticipation of a reduction in stimulus by the central bank, but a weak job market coupled with a sluggish economy have become reasons to believe the Fed is not likely to make any change to its current stimulus plan.

There are some out there who still believe the Fed is set to reduce its asset purchases by at least $20 billion per month to $65 billion then take a wait and see stance. Based on the current four day rally, it looks as if these traders are beginning to lighten up their positions.

Oversold conditions may be contributing to the rally from a technical perspective, but before getting too excited about the long side, keep in mind that it has only retraced 50% of a short-term range to 140’09 to 140-23. The first serious sign that conditions are shifting will be a breakout over a downtrending Gann angle at 140’20.

A sustained move over this angle could trigger an acceleration into another 50% retracement level at 141’26.

With the T-bonds trading inside of a retracement zone, it is possible that it has reached a balance point ahead of the Fed statement on June 19^th. This could lead to a sideways, directionless trade on Tuesday and into Wednesday.