The bond market remains a key focus in trading this week

<p>It was a tale of two halves in the bond market last week. The first saw peculiarly strong bids in Treasuries, which led to a big drop in USD/JPY and a decent rally in the likes of gold. The second was a reversal of that after the Friday jobs data, in which bonds were sold off heavily in the aftermath. That led to 10-year Treasury yields rising back above the 4% mark:</p><p>Interestingly, there are no easy answers for what is driving flows in bonds at the moment. Was it month-end and a slight double top pattern near 4.20% for yields? On the latter, is last Friday's bounce more prominent as it held near 3.80% – similar to December?</p><p>Or perhaps, there are other factors in play to consider as well: <a href="https://www.forexlive.com/news/dark-days-are-coming-for-us-commercial-real-estate-and-the-banks-holding-the-loans-20240203/" target="_blank" rel="follow">Dark days are coming for US commercial real estate and the banks holding the loans</a></p><p>Whatever the case is, it certainly is shaping up to be one that will continue to have an impact on broader markets. Currently, we're seeing 10-year yields move back to its 200-day moving average (green line) at 4.097%. That will be the first technical hurdle to take notice of in trading this week.</p><p>If yields do push higher, then the double top near 4.20% will come into play. Alternatively, if yields do push lower, then the double bottom near 3.80% will be the one under scrutiny. Those will be the key lines in the sand to watch out for in trading this week.</p><p>In turn, it will also play a role in impacting dollar sentiment over the course of the week. In particular, any significant moves in this space will spill over to USD/JPY and gold especially.</p>

This article was written by Justin Low at www.forexlive.com.