The decision by the Federal Open Market Committee to cut the fed funds rate on September 18 has led to a surge in Treasury yields.

The 10-year yield increased by 58 basis points, rising to 4.18% from a low of 3.6% on September 17. This brings the yield close to its 200-day average and key Fibonacci retracement levels around 4.3%. The five-year yield also experienced a notable increase, reaching 3.98% from 3.39%, with resistance levels identified between 4.0% and 4.2%. Similarly, the two-year yield closed at 4.03%, up from an intraday low of 3.5% on September 25, with key levels above starting at 4.1%.

The iShares 20+ Year Treasury Bond (TLT) broke through significant support levels at 93.40, with the next key level at a 61.8% retracement of 9.16%. Analysts are optimistic and anticipate a potential rally that could lead to declines in yields to 3.25% for the five- and 10-year notes, and down to 3% for the two-year. Commitment of Traders data continues to show a bullish sentiment for the two-, five-, and 10-year Treasury securities.