The 10-year US treasury yield bounced around a bit, but from the chart, technical pressures remain downward. Its 100- and 200-day moving averages made a negative cross at 4.34, and the 50-day moving average has turned down after peaking at 4.47%. The 10-year yield was at 4.33% as at July 5, a tad above 4.30% as at June 28.
Technically, the Straits Times Index is retreating after a surge July 2, 3 and 4 before ending lower on July 5. Since the surge took the STI above the twice tested 3,350 levels on relatively higher volume (but not spectacularly high) the breakout above this level should be valid and sustained. An earlier break above 3,250 indicated a target of 3,450 and this should be considered met. A new upside is likely and the quantum would depend on the extent of the current retreat.
The new support is at 3,350 following the break above this level on Jul 2. The index ended the week of July 1-5 at 3,410, off the intra-week high of 3,439, representing a gain of 67 points week-on-week.
