OUTLOOK: Price Signal Summary - Bull Cycle In Gilts Remains In Play
Jan-30 12:22
- In the FI space, Bund futures continue to trade below their recent highs. The latest pullback appears corrective and a short-term bull cycle is in play. The Jan 15 rally highlighted a reversal signal - a bullish engulfing candle. It continues to suggest scope for a corrective phase that is allowing an oversold trend condition to unwind. Sights are on 131.97, the 20-day EMA. A clear breach of the average would strengthen the bullish theme. The bear trigger is 130.28, the Jan 15 low. Initial support lies at 131.00, the Jan 16 / 24 low.
- The medium-term trend condition in Gilt futures remains bearish. However, recent gains continue to highlight a corrective phase and signal scope for a continuation higher near-term. The contract has traded through the 20-day EMA and the focus is on 92.75, the 50.0% retracement of the Dec 3 - Jan 13 bear leg. A break would open 93.09, the Dec 20 high. Initial support is at 91.52, the Jan 24 low.
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USD: Finding a broader bid
Dec-31 12:15
- A broader bid is going through the Dollar, printing an intraday high against the Pound, AUD, CAD, CHF, ZAR, and NZD.
- Market participants will be looking at the AUDUSD and the Psychological 0.6200 level, printed a 0.6199 low on the 19th December, this was also its lowest level since October 2022.
- A clear break through that area, will open to 0.6170, the 2022 low and lowest level since April 2020.
EURIBOR OPTIONS: Put ladder buyer
Dec-31 12:03
ERZ5 98.00/97.75/97.50p ladder, bought for flat in 2.25k total.
GILTS: Extending gains ahead of the close
Dec-31 11:50
- Overall it is a fairly decent move in Gilt, the contract continues to gain, the lower volume has been helping, but there's been a pick up in the past few minutes with just under 30 minutes left for the trading session.
- Around 2k cumulative lots have been bought in the past few minutes, multiple clips.
