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OUTLOOK: Price Signal Summary - Corrective Cycle In Gilts Remains In Play

OUTLOOK
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  • In the FI space, Bund futures have pulled back from their recent highs. The move down has resulted in a break of support at the 20-day EMA, at 134.29. This signals scope for a deeper retracement near-term, potentially towards the 50-day EMA, at 133.58. Clearance of this average would undermine a bullish theme. For bulls, a reversal higher would refocus attention on key resistance and the bull trigger at 135.66, the Aug 5 high.
  • A bull cycle in Gilt futures is still in play, however, the pullback from Tuesday’s peak highlights a correction and Thursday’s move lower reinforces this theme. The extension is allowing an overbought condition to unwind. Support at 100.01, the 20-day EMA, has been pierced. The clear break of this average signals scope for a deeper retracement and exposes 99.29, the Sep 10 low. A reversal higher would refocus sights on 101.54, Sep 17 high.
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  • In the FI space, Bund futures have pulled back from their recent highs. The move down has resulted in a break of support at the 20-day EMA, at 134.29. This signals scope for a deeper retracement near-term, potentially towards the 50-day EMA, at 133.58. Clearance of this average would undermine a bullish theme. For bulls, a reversal higher would refocus attention on key resistance and the bull trigger at 135.66, the Aug 5 high.
  • A bull cycle in Gilt futures is still in play, however, the pullback from Tuesday’s peak highlights a correction and Thursday’s move lower reinforces this theme. The extension is allowing an overbought condition to unwind. Support at 100.01, the 20-day EMA, has been pierced. The clear break of this average signals scope for a deeper retracement and exposes 99.29, the Sep 10 low. A reversal higher would refocus sights on 101.54, Sep 17 high.