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Price Signal Summary - Gilts Remain Vulnerable

  • In the FI space, Bund futures remain soft following last week’s move lower. The pullback from 130.20, the Oct 12 high highlights the end of the recent corrective recovery between Oct 4 - 12. Note that the medium-term trend direction is down and moving average studies continue to reflect this. An extension lower would open 126.62, the Oct 4 low and bear trigger. Key short-term resistance and the bull trigger has been defined at 130.20. First resistance is at 128.68, the 20-day EMA.
  • Gilt futures traded lower last week and the contract maintains a bearish theme. Price has cleared key support at 91.47, the Aug 17 low. This confirms a resumption of the downtrend and paves the way for a move towards 90.38, the Oct 12 2022 low (cont) and a major support. Initial firm resistance is at 93.35, the 20-day EMA. Short-term gains would be considered corrective.

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