Thought I would chime in with what I am seeing for treasury's going forward. I have an upper target of about 4.75 on the 10 year but am actively looking for a move to 4.5%. Here's how I get there.
First 3 technical looks at yields(all are same chart looked at in different views):
(1)A look at the channel developed since bottom last year. Updates in green. Price has bounced on 100 day EMA and RSI has dipped below and crossed back above the 40 level, both bullish developments. Now watching the mid range of the channel around 3.9.
(2)A look at fibonacci retracements since bottom. You can see price also tested and held the 38% retracement level, another bullish development. [Editor's note: There is definitely something to these fibonacci numbers.]
(3)Another way to look at the bottoming process created at end of 09. Cup and Handle in yields, shows how the above movements are happening on top of a clear reversal pattern:
Given the obvious internal strength in the near term look at yields I am using the longer term 20 year chart to develop my target as to where this move should come under pressure. Here you can clearly see the longer term downtrending channel. My feel is given the above coupled with all the fundamental factors everyone knows from supply to currency flaws we are going to test the upper end of the channel. Currently it sits at 5%, but since this movement wont happen overnight I see that target coming in towards the 4.5-4.75 range as time passes.