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Price Signal Summary - Pullback In Gilts Considered Corrective - For Now

  • In the FI space, Bund futures have pulled back from last week’s highs and price is once again trading below the 20- and 50-day EMAs. Key short-term support to watch lies at 136.38, the Jan 30 low where a break would strengthen a bearish condition and pave the way for a deeper pullback. On the upside, a breach of last Thursday’s high of 139.86 is required to reinstate a bullish theme. This would expose the 140.73 key resistance, the Jan 19 high. Initial resistance is at 137.87, the 50-day EMA.
  • Gilt futures traded sharply higher last week and cleared 106.00 and more importantly 107.06, the Nov 24 and a key resistance. The break confirmed a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. This opens the 108.00 handle next. Initial firm support to watch lies at 104.04, Jan 30 low. The latest pullback is considered corrective. However, a break of 104.04 would highlight a short-term top.

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