BTP TECHS: (H6) Has Breached Resistance

MNI discusses Beijing’s plans to expand foreign investment in the services sector -- on MNI Policy MainWire now, for more details please contact sales@marketnews.com.

• RES 4: 92.55 High Nov 11 
• RES 3: 92.31 High Nov 12          
• RES 2: 92.00 Round number resistance
• RES 1: 91.29/93 High Dec 9 / High Nov 27      
• PRICE: 91.10 @ Close Dec 9
• SUP 1: 90.62/90.53 Low Dec 8 / Low Nov 25 & 26       
• SUP 2: 90.28 Low Nov 21  
• SUP 3: 90.00 Round number support    
• SUP 4: 89.86 Low Nov 19 and the bear trigger     

Recent weakness in Gilt futures expose the next important support at 90.53, the Nov 25 and 26 low. A breach of this level would undermine a bull theme and instead signal scope for a deeper retracement towards 89.86, the Nov 19 low and a bear trigger. For bulls, a resumption of gains would signal scope for a climb towards resistance at 92.55, the Nov 11 high. Initial firm resistance to watch is 91.93, the Nov 27 high.

• RES 4: 121.33 High Oct 21 and a key resistance area 
• RES 3: 121.37 High Nov 13 
• RES 2: 121.24 High Nov 26 
• RES 1: 120.17/77 Low Nov 20 / High Dec 3   
• PRICE: 119.62 @ Close Dec 9
• SUP 1: 119.34 Low Dec 9           
• SUP 2: 119.30 1.618 proj of the Nov 13 - 20 - 26 price swing  
• SUP 3: 119.12 1.764 proj of the Nov 13 - 20 - 26 price swing
• SUP 4: 118.84 2.000 proj of the Nov 13 - 20 - 26 price swing

BTP futures have this week traded through an important support at 120.17, the Nov 20 low. This highlights the fact that a bearish phase remains in play for now, signalling scope for a deeper short-term retracement. The impulsive sell-off on Monday opens 119.30 next, a Fibonacci projection. The contract is oversold, a recovery would allow this set-up to unwind. Initial firm resistance to watch is 120.17, the Nov 20 low.