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Price Signal Summary - Gilts Remain Bearish And Sights Are On Key Support

  • In the FI space, Bund futures maintain a bearish tone and the contract traded sharply lower yesterday, before finding some support. 131.12, the Aug 4 low and 130.60, the Jul 10 low, have been cleared. This strengthens the current bearish theme and marks a resumption of the long-term downtrend. Attention turns to the Psychological 130.00 handle next. A break would open 129.69, the 1.00 projection of the Jul 19 - Aug 4 - Aug 8 price swing. Initial resistance is seen at 131.67, Monday’s high. Short-term gains are considered corrective - for now.
  • A bearish theme in Gilt futures remains intact and Friday’s sharp sell-off plus this week’s extension, reinforces this condition. The contract has traded through support at 93.70, the Aug 4 low and a bear trigger. The breach marks a continuation of the bear cycle that started Jul 19 and opens 92.09 next, the Jul 7 low and a key support. Key short-term resistance has been defined at 95.82, the Aug 10 high. Initial resistance is at 93.70.

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