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Price Signal Summary - Bunds Trade Lower But Remain Above Recent Lows

OUTLOOK
  • In the FI space, Bund futures are trading lower but remain above their recent lows - for now. The contract traded through resistance at the 20-day EMA yesterday - at 131.15. An extension higher would highlight a possible short-term reversal and open 131.82, the Sep 4 high. Key resistance is still far off at 132.91, the Aug 8 high. For bears, a continued sell-off would refocus attention on key support at 129.72, Aug 15 low.
  • Gilt futures traded higher yesterday, extending the recovery from 93.36, the Sep 6 low. Key short-term resistance at 95.79, the Sep 1 high, has been breached and this signals a resumption of the bull cycle that started Aug 17. The break higher establishes a bullish price sequence of higher highs and higher lows and opens 96.66 next, 0.764 projection of the Aug 17 - Sep 1 - Sep 6 price swing, ahead of 97.00. On the downside, initial firm support is seen at 94.63, the 20-day EMA.

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