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Price Signal Summary - Bull Cycle In Gilts Remains In Play

  • In the FI space, a strong bounce in Bund futures last week resulted in a break of resistance at the 20- and 50-day EMA values. The move higher threatens the recent bearish theme and signals scope for a stronger recovery, potentially towards 133.45, the Aug 8 high and the next key resistance. The contract has pulled back from its recent highs, initial firm support lies at 131.20, the Aug 23 low. A break of this level would be seen as a bearish development.
  • A bearish theme in Gilt futures remains intact, however, a strong rally last week suggests the contract remains in a short-term corrective cycle. Price is holding on to the bulk of its recent gains reinforcing a short-term bullish theme. An extension higher would open 95.82, the Aug 10 high (cont). Note that trend signals continue to highlight a downtrend. The bear trigger has been defined at 91.47, the Aug 17 low. Initial support lies at 94.15, the Aug 25 low.

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