US 10-year yields will likely retest the November high, according to George Davis, Chief Technical Strategist at RBC Capital Markets.

Davis says a break above 1.86 favours an extension to the November high at 1.97 (see Chart) and that pullbacks to resistance at 1.78 and 1.71 should attract selling interest in bonds. The RSI is currently in neutral territory suggesting there is scope for further upside in yields.

Update 9 January 2020: Davis is retaining his bearish core view for global 10-year bonds, with the recent geopolitical spike in risk off sentiment failing to derail the pre-existing uptrends for yields. He thinks the 1.70 level in US 10-year yields will serve as a key pivot for the risk backdrop and have a ripple effect on other markets. Although initial support is at 1.95, yields will have to pierce the November high at 1.97 to trigger a new phase of bearish momentum (bullish for yields). A daily close below 1.70 would nullify his core bearish view for bonds (see Updated Chart).

See Chart / Updated Chart.