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

OUTLOOK
BulletMarketsFixed Income BulletsForeign Exchange Bullets
  • In the FI space, Bund futures continue to trade below their recent highs. The latest move down - a correction - has resulted in a breach of the 20-day EMA. This does signal scope for a deeper retracement near-term, potentially towards the 50-day EMA, at 133.68. Clearance of this average would undermine a bullish theme. For bulls, a stronger 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 remains intact, however, the sell-off that started Sep 7, highlights a corrective phase and this week’s move lower suggests potential for a continuation near-term. Support at 98.92, 76.4% of the Sep 2 - 17 bull leg, has been cleared and this strengthens the current bearish theme. The break exposes the key support at 98.11, the Sep 2 low. For bulls, a clear reversal higher would refocus sights on 101.54, Sep 17 high.Initial resistance is at 99.82, the 20-day EMA.
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  • In the FI space, Bund futures continue to trade below their recent highs. The latest move down - a correction - has resulted in a breach of the 20-day EMA. This does signal scope for a deeper retracement near-term, potentially towards the 50-day EMA, at 133.68. Clearance of this average would undermine a bullish theme. For bulls, a stronger 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 remains intact, however, the sell-off that started Sep 7, highlights a corrective phase and this week’s move lower suggests potential for a continuation near-term. Support at 98.92, 76.4% of the Sep 2 - 17 bull leg, has been cleared and this strengthens the current bearish theme. The break exposes the key support at 98.11, the Sep 2 low. For bulls, a clear reversal higher would refocus sights on 101.54, Sep 17 high.Initial resistance is at 99.82, the 20-day EMA.