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OUTLOOK: Price Signal Summary - Bear Cycle In Gilts Still In Play

OUTLOOK
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  • In the FI space, Bund futures are trading just above Monday’s low. The latest bearish reversal has resulted in a move through both the 20- and 50-day EMAs and undermines a recent bullish outlook. Price traded lower again, Monday and a continuation would further strengthen a developing bearish threat. This would open 132.65, the Sep 2 low. Initial resistance is at 134.48, the 20-day EMA. A clear break of this average is required to signal a possible reversal.
  • A bear threat in Gilt futures remains present. Friday’s impulsive sell-off, and Monday’s move lower, reinforces this theme. The contract has traded through support at 98.11, the Sep 2 low and a bear trigger. The break strengthens the downtrend, signalling scope for a deeper retracement, towards 96.23, a 1.00 projection of the Sep 17 - 30 - Oct 1 price swing, and 96.00. Initial firm resistance has been defined at 99.47, the Oct 1 high and just above the 20-day EMA. First resistance is 96.93, Monday’s high.
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  • In the FI space, Bund futures are trading just above Monday’s low. The latest bearish reversal has resulted in a move through both the 20- and 50-day EMAs and undermines a recent bullish outlook. Price traded lower again, Monday and a continuation would further strengthen a developing bearish threat. This would open 132.65, the Sep 2 low. Initial resistance is at 134.48, the 20-day EMA. A clear break of this average is required to signal a possible reversal.
  • A bear threat in Gilt futures remains present. Friday’s impulsive sell-off, and Monday’s move lower, reinforces this theme. The contract has traded through support at 98.11, the Sep 2 low and a bear trigger. The break strengthens the downtrend, signalling scope for a deeper retracement, towards 96.23, a 1.00 projection of the Sep 17 - 30 - Oct 1 price swing, and 96.00. Initial firm resistance has been defined at 99.47, the Oct 1 high and just above the 20-day EMA. First resistance is 96.93, Monday’s high.