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Price Signal Summary - Gilts Remain Vulnerable

  • In the FI space, Bund futures are trading closer to their recent lows. The contract has this week breached support at 136.38, the Jan 30 low and this has strengthened the current bearish cycle. The focus is on 135.08 next, the Jan 4 low. Moving average studies are in a bear-mode position, reinforcing current conditions and highlighting bearish sentiment. On the upside, resistance to watch is at 137.71, the 50-day EMA.
  • Gilt futures are trading lower and the contract is approaching support at 104.04, the Feb 8 low. A break of 104.04 would threaten the recent bull theme and highlight a short-term top. This would expose 103.94 initially, the 50-day EMA and a key support. Initial resistance is seen at 105.67, the Feb 9 high where a break is required to ease the current bearish threat. This would also signal a short-term reversal.

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