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Price Signal Summary - Gilts Breach Short-Term Resistance

OUTLOOK
  • In the FI space, recent gains in Bund futures from 129.37, the May 31 low, and the recovery this week, appear to be a correction. A resumption of weakness would again refocus attention on 129.37, the May 31 low and bear trigger. Clearance of this level would resume the downtrend and open the 129.00 handle. Key resistance to watch is 131.52, the 50-day EMA. A clear break of this average would instead highlight a potential reversal.
  • Yesterday’s strong rally in Gilt futures, resulted in a break of resistance 97.86, the Jun 4 high, and 98.05, 76.4% of the May 16 - 29 bear cycle. This cancels a recent bearish threat and instead highlights a resumption of the bull cycle that started May 29. A continuation higher would signal scope for a climb towards 98.89, the May 16 high and a key resistance. Initial support lies at 97.12, the 20-day EMA. Key support is at 96.12, the Jun 10 low.
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  • In the FI space, recent gains in Bund futures from 129.37, the May 31 low, and the recovery this week, appear to be a correction. A resumption of weakness would again refocus attention on 129.37, the May 31 low and bear trigger. Clearance of this level would resume the downtrend and open the 129.00 handle. Key resistance to watch is 131.52, the 50-day EMA. A clear break of this average would instead highlight a potential reversal.
  • Yesterday’s strong rally in Gilt futures, resulted in a break of resistance 97.86, the Jun 4 high, and 98.05, 76.4% of the May 16 - 29 bear cycle. This cancels a recent bearish threat and instead highlights a resumption of the bull cycle that started May 29. A continuation higher would signal scope for a climb towards 98.89, the May 16 high and a key resistance. Initial support lies at 97.12, the 20-day EMA. Key support is at 96.12, the Jun 10 low.