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Price Signal Summary - Corrective Bounce In Gilts

OUTLOOK
  • In the FI space, a bear cycle in Bund futures remains in play and last week’s fresh cycle lows reinforce this theme. The contract has breached the key support and bear trigger at 129.53, the Apr 25 low. The move down confirms a resumption of the bear trend that started late December last year and paves the way for 128.42 next, the Nov 1 ‘23 low (cont). Initial resistance is at 130.31, the 20-day EMA.
  • Gilt futures traded sharply lower last week as the contract extended the reversal that started May 16. The sell-off resulted in a break of support around 95.87, the May 1 low, and opens 95.17 next, a 2.382 projection of the May 16 - 20- 21 price swing. The latest recovery is considered corrective. Initial firm resistance to watch is 97.44, the May 23 high. First resistance is Friday’s high of 96.44.

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