Bearish Pressure Extends, Bunds, Gilts And Treasuries Slide

Bund futures (Z1) are lower this morning and have traded through the 172.00 handle. This confirms a resumption of the downtrend that started Aug 5 and paves the way for a deeper retracement. Note that price action last week moved below the 50-day EMA on the continuation chart. This also reinforces the current bearish theme. The focus is on 171.49 next, a Fibonacci projection. On the upside, initial firm resistance is 172.76, Sep 2 and 3 high. Support levels to watch:

• SUP 1: 171.49 2.236 proj of the Aug 5 - 11 - 17 price swing
• SUP 2: 171.30 2.382 proj of the Aug 5 - 11 - 17 price swing
• SUP 3: 171.16 2.500 proj of the Aug 5 - 11 - 17 price swing

Gilt futures (Z1) are approaching support and the short term bear trigger at 128.11, Sep 1 and 3 low. A break would confirm a resumption of the current bear cycle. Support levels to watch are:

• SUP 1: 128.03 Low Jul 6 (cont)
• SUP 2: 127.65 61.8% retracement of the Jun 3 - Aug rally (cont)
• SUP 3: 127.50 Low Jun 28 (cont)

Treasuries (Z1) are offered too this morning. The key support levels to watch are:

• SUP 1: 132-25+ Low Aug 26
• SUP 2: 132-21+ Low Aug 11
• SUP 3: 132-12 0.764 projection of the Aug 4 - 11 - 17 price swing