As we head toward Tuesday's Fed Chair testimony on Capitol Hill, let's notice that 10-year yield has reversed from pushing up against key near-term resistance at 2.14% toward a test of key near-term support at 2.05%, which if violated and sustained, should trigger downside follow-through into my optimal-target support zone of 2.00% to 1.95% -- prior to my expectation of the start of a new upleg.
Meanwhile, if all of the near-term digestion/corrective action in yield off of its Feb 18 high at 2.16% was expected to elicit an opposite reaction from spot gold (based on the inverse relationship since the start of 2015) -- well, this time is a bit different: Gold has carved out a sideways range at best since Feb 18.
That said, however, the intraday action off of Monday's low at $1191.10 exhibits constructive form so far.
As long as $1191.10 remains a viable low, my bias is for the emergence of strength that challenges Monday's intraday high at $1210.68-- heading into "Testimony Tuesday."
