MNI European Morning FI Technical Analysis

By Nick Shamim

6 Aug 2018

BUND TECHS: Bullish Reversal

*RES 4: 163.39 High July 20

*RES 3: 162.70 Low July 19 now resistance

*RES 2: 162.47 High July 25

*RES 1: 162.30 High July 30, 21-DMA

*PREVIOUS CLOSE: 162.05

*SUP 1: 161.99 Hourly High August 3

*SUP 2: 161.48 Low August 3

*SUP 3: 161.17 Low August 2

*SUP 4: 160.86 Low August 1

Friday's price action has once again shifted the short-term outlook bullish with

161.99 turning from resistance to support in what looks like an inverse-head-and

shoulders formation. While prices remain above this level, the July 30 high and

21-DMA at 162.30 will be the next hurdle for the bulls, before a potential run

at the July 20 highs. Bears need to move below 161.99 to shift the short-term

outlook neutral and below 161.48 to re-establish the bearish trend.

BOBL TECHS: (U18) Above 131.860 To Confirm Bullish Breakout

*RES 2: 132.000 High July 25

*RES 3: 131.943 21-DMA

*RES 2: 131.910 High July 30

*RES 1: 131.860 High August 3

*PREVIOUS CLOSE: 131.840

*SUP 1: 131.660 Low August 3

*SUP 2: 131.520 Hourly Low August 2

*SUP 3: 131.360 Low August 1

*SUP 4: 131.146 100-DMA

Bulls are back in the ascendency following Friday's strong rally, with only a

break of 131.860 standing in the way of a bullish reversal pattern. Above this,

the July 30 high and 21-DMA are the next key hurdles for the bulls. On the

downside, bears need to break back below Friday's low at 131.660 to negate the

bullish picture and re-establish the downtrend.

SCHATZ TECHS: (U18) Bears Need To Reclaim 111.915 To Maintain Downtrend

*RES 4: 112.009 55-DMA

*RES 3: 112.000 Low July 5, July 16 now resistance

*RES 2: 111.982 21-DMA

*RES 1: 111.970 High August 3

*PREVIOUS CLOSE: 111.940

*SUP 1: 111.915 Hourly low August 3

*SUP 2: 111.885 Hourly Low August 2

*SUP 3: 111.850 Low August 1

*SUP 4: 111.815 May 22 High now support

Friday's rally has returned the focus to the upside, with bulls needing a break

above 111.970 to firmly establish a bullish trend and target the 21-DMA at

111.982. On the downside, a close below Friday's hourly low of 111.915 would be

needed to re-establish the broader downtrend, which would be further confirmed

by a push below 111.885.

GILT TECHS: Back To Neutral

*RES 4: 122.99 Low July 26 now resistance

*RES 3: 122.86 High July 31

*RES 2: 122.77 High August 3

*RES 1: 122.72 55-DMA

*PREVIOUS CLOSE: 122.66

*SUP 1: 122.62 Hourly High August 3

*SUP 2: 122.26 Low August 3

*SUP 3: 122.00 100-DMA

*SUP 4: 121.99 Low August 2

The contract rallied hard off of its 100-DMA (currently at 122.00) late last

week, with Friday's gains allowing prices to break out of the short-term

downtrend. Bulls now need to close above Friday's high of 122.77 to shift the

focus higher and establish a potential bullish reversal pattern. On the

downside, bears need a fall back below Friday's low at 122.26 to re-establish

the downtrend and mount another assault on the 100-DMA support level.

SHORT-STERLING TECHS: (U18) Downtrend Intact But Losing Momentum

*RES 4: 99.198 55-DMA

*RES 3: 99.180 Channel resistance from May 31 high

*RES 2: 99.165 200-DMA

*RES 1: 99.155 21-DMA

*PREVIOUS CLOSE: 99.145

*SUP 1: 99.150 Lows July 5 & 23

*SUP 2: 99.090 High Apr 26 now support

*SUP 3: 99.060 Low Apr 24

*SUP 4: 99.030 Low Apr 18

Short sterling posted solid gains on Friday, ending the week on a stronger note.

While the downtrend remains intact for now, it is losing momentum and a close

above the 21-DMA at 99.155 would provide impetus for further gains towards the

200-DMA and channel resistance. A break above here would be very bullish. Bears

need to push below 99.090 to provide new downside momentum and set their sights

on the April lows.

EURIBOR TECHS: (Z18) Downside Potential Increases

*RES 4: 100.310 - 2018 High Repeatedly May

*RES 3: 100.305 - Repeated daily lows Apr/May now resistance

*RES 2: 100.300 - Highs June 14 & 15, Repeated highs July

*RES 1: 100.298 - 21-DMA

*PREVIOUS CLOSE: 100.285

*SUP 1: 100.285 - 55-DMA

*SUP 2: 100.277 - 200-DMA

*SUP 3: 100.265 - High June 11 now support

*SUP 4: 100.245 - Low June 8

Friday's selloff has added further weight to the bearish case for the December

Euribor contract, which sits on its 55-DMA after bouncing off support at its

200-DMA. Bears need a successful move below the 200-DMA at 100.277 to trigger a

bearish technical pattern. Bulls need to remain above the 55-DMA in order to

keep the medium-term bullish trend intact, and push above the 21-DMA at 100.298

to target new highs.

US 10YR FUTURE TECHS: (U18) Threatening A Bullish Break

*RES 4: 119.250 21-DMA

*RES 3: 119-235 55-DMA

*RES 2: 119-210 High July 31

*RES 1: 119-205 High August 3

*PRICE: 119-185 @ 0635GMT

*SUP 1: 119-150 Hourly High August 3

*SUP 2: 119-095 Hourly Low August 3

*SUP 3: 119-020 Low Aug 1

*SUP 4: 119-000 Support

10-year futures remain bid following Friday's rally, with a push above Friday's

intraday high needed for the contract to break out of its short-term downtrend

that has been in place over the past two weeks. Such a move would open up a run

at the 21-DMA and 55-DMA and potentially form a bullish trend. On the downside,

bears need a close below the intraday high of 119-150 to shift the focus back

lower and mount a retest of the August 1 low.

US TSYS: US 10-YEAR YIELD TECHS: Reversal Potential

*RES 4: 3.050 - Low May 22

*RES 3: 3.014 - High August 1

*RES 2: 3.000 - Resistance

*RES 1: 2.966 - Hourly Low August 3

*PRICE: 2.953 @ 0645GMT

*SUP 1: 2.930 - Low July 31

*SUP 2: 2.926 - Low July 25

*SUP 3: 2.914 - 55-DMA

*SUP 4: 2.913 - 21-DMA

Thursday's failure to surmount the 3.0% level was following by a large selloff

on Friday which looks increasingly like a bearish reversal pattern. Bears need a

close below the July 31 low to confirm this and set their sight on the 55-DMA

and 21-DMA. Bulls need to recover 2.966% in the first instance if they are to

regain the upper hand and mount another test of 3.0%.

--MNI London Bureau; tel: +44 203-586-2229; email: nick.shamim@marketnews.com