BTP TECHS: (M5) Bear Threat Remains Present
- RES 4: 120.39 High Feb 28
- RES 3: 119.31 Low Mar 4 and a gap high on the daily chart
- RES 2: 118.56 High Mar 5
- RES 1: 116.75 Low Mar 5
- PRICE: 116.30 @ 07:10 Mar 7
- SUP 1: 115.83 Low Mar 6
- SUP 2: 115.52 2.618 proj of the Feb 7 - 19 - 28 price swing
- SUP 3: 115.00 Round number support
- SUP 4: 114.81 3.000 proj of the Feb 7 - 19 - 28 price swing
BTP futures remain in a clear bear-mode condition following this week’s steep sell-off. The move down has resulted in a breach of key support at 116.78, the Jan 14 low. The break strengthens a bearish theme and opens 115.52 next, a Fibonacci projection. The downtrend is in oversold territory, a recovery would allow this set-up to unwind. Initial firm resistance is seen at Wednesday’s 118.56 high.
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BUNDS: Another busy overnight session
- It is another relatively busy overnight session for Bund, with elevated volumes in {us} US Tnotes and the German contract going into the European session.
- Risk remains tilted to the upside for the German Bond on growth concerns in Europe, as well as Technically.
- Bund is now eyeing 133.58, Monday's quick/ fast market high printed on Monday, but better will now be seen at 2.30% in Yield terms.
- The German 10yr Yield printed at 133.86 high, with a 2.309% low on the 2nd January.
- Today sees Services PMIs, but final readings for the major developed countries, so should be taking a back seat.
- Focus will be on the US ISM services, while US ADP is also due.
- US Quarterly refunding will garner interest as well.
- SUPPLY: Gilt 2053 £2bn (Equates to 19.8k Gilt) could somewhat weigh into the bidding deadline.
- SPEAKERS: Fed Barkin (x2), Goolsbee, Bowman, ECB Lane.
RATINGS: Moody's Affirmed The EFSF On Tuesday
Moody’s affirmed the European Financial Stability Facility (EFSF) at Aaa; Outlook stable in an ad-hoc ratings announcement after the close on Tuesday.
BTP TECHS: (H5) Bullish Theme
- RES 4: 122.85 High Dec 12
- RES 3: 121.88 76.4% retracement of the Dec 11 - Jan 13 bear leg
- RES 2: 120.98 61.8% retracement of the Dec 11 - Jan 13 bear leg
- RES 1: 120.45 HIgh Jan 5
- PRICE: 120.26 @ Close Feb 3
- SUP 1: 119.38 20-day EMA
- SUP 2: 118.65/117.16 Low Jan 24 / 13 and the bear trigger
- SUP 3: 116.59 76.4% retrace of the Jun - Dec ‘24 bull cycle (cont)
- SUP 4: 116.07 Low Jul 8 ‘24 (cont)
A corrective phase in BTP futures remains intact.The latest move higher has resulted in a breach of both the 20- and 50- day EMAs. This signals scope for an extension of the bull cycle and sights are on 120.98, a Fibonacci retracement. On the downside, initial key support to watch lies at 118.65, the Jan 24 low. Clearance of this price point would highlight a reversal and the end of the correction.
