BUND TECHS: (Z5) Corrective Cycle Extends
Oct-24 13:52
- RES 4: 130.99 76.4% retracement of Jun 13 - Sep 25 bear leg (cont)
- RES 3: 130.80 High Jun 13 and key resistance
- RES 2: 130.63 1.500 proj of the Sep 3 - 10 - 25 price swing
- RES 1: 130.07/59 Intraday high / High Oct 17 and the bull trigger
- PRICE: 129.51 @ 14:35 BST Oct 24
- SUP 1: 129.43 20-day EMA
- SUP 2: 129.04 50-day EMA
- SUP 3: 128.52 76.4% retracement of the Sep 25 - Oct 17 Bull leg
- SUP 4: 128.25 Low Oct 7
Bund futures have traded sharply lower today as the contract extends the retracement from the Oct 17 high of 130.59. The move down is considered corrective and is allowing an overbought trend condition to unwind. Initial key support is 129.43, the 20-day EMA. A break of this level would expose the 50-day EMA, currently at 129.04. For bulls, a reversal would refocus attention of the key resistance at 130.59, the Oct 17 high.
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- A bid in crude oil (albeit with that move linked to geopolitical risk), coupled with headlines promoting EGB spread widening and a sizeable US$IG deal, have provided the major headwinds for bonds over the past couple of hours.
- Recent comments from BoE Governor, as he continued to lean into the idea of further rate cuts, may have provided some modest background support.
- Futures last 91.03 vs. session lows of 90.96.
- Bulls now look to the September 11 high (91.82), while initial support of note is seen at the Sep 2/22 lows (90.65/60).
- Yields little changed to 1bp higher, curve marginally steeper.
- SONIA futures flat to +1.5, off highs given the move in bonds.
- BoE-dated OIS still pricing ~6bp of cuts through year-end and the next cut is fully discounted come the end of the April meeting.
