TURKEY 10 YEAR BOND YIELD

May 2013 recorded the low for the Turkish 10 year government bond yields. Year-long downtrend was reversed with the breakout above 7.2 levels. Yields broke above 1) downward sloping trend line at 7.0 2) flat horizontal resistance at 7.2 and 3) 200-day moving average at 7.1. Sharp rally carried the yields to 9.5 levels. Since the beginning of July, 9.5 has been short-term resistance. However, chart formation (ascending triangle) suggests higher yields towards 10.5 levels unless we see a breakdown below 8.6 levels in the coming days/weeks. For the time being 10 year bond yields are in a short-term consolidation. Technical outlook is positive for the yields and negative for the bonds, as the 10 year yield established its uptrend above the 200-day moving average. During any pull back strong 7.60-8.60 area will act as strong support. Breakout above 9.5 levels will target 10.5 in the short-term.