Back
17 Oct 2014
Bunds remain constructive after 0.88% breakout - RBS
FXStreet (Łódź) - Dmytro Bondar, Technical Strategist at RBS points out that Bund yields have broken below 0.88% but are expected to remain constructive to 0.63%.
Key quotes
"However, in the near term, a correction is likely, as the price chart saw a Tweezer top and inside session, pointing to a likely price decline to 149.89 (a key Fibonacci level and 20-day MA) and possibly 149.50 and 148.90."
"This would get oscillators out of the overbought region and once support gained at one of the mentioned levels (perhaps 149.90 would see a base, although a dip to 149.50 area may occur), a resumption of the upwards pressure would be expected with re-testing of 152.47 and further extension of the move up to 154.07."
"Overall, cross-asset technical picture suggests the next few days up to a week to see some risk on moves, but they are likely to be followed by another risk off, which is suggested by some risk assets like BTP and DAX, which have formed reversal patterns but are expected to have initial return moves."
"Thus DAX saw a Head and Shoulders triggered with an initial return move to the neckline expected but further decline likely."
Key quotes
"However, in the near term, a correction is likely, as the price chart saw a Tweezer top and inside session, pointing to a likely price decline to 149.89 (a key Fibonacci level and 20-day MA) and possibly 149.50 and 148.90."
"This would get oscillators out of the overbought region and once support gained at one of the mentioned levels (perhaps 149.90 would see a base, although a dip to 149.50 area may occur), a resumption of the upwards pressure would be expected with re-testing of 152.47 and further extension of the move up to 154.07."
"Overall, cross-asset technical picture suggests the next few days up to a week to see some risk on moves, but they are likely to be followed by another risk off, which is suggested by some risk assets like BTP and DAX, which have formed reversal patterns but are expected to have initial return moves."
"Thus DAX saw a Head and Shoulders triggered with an initial return move to the neckline expected but further decline likely."