Technical Update - US, EU and UK 10 years Interest Rates futures
Kim Cramer Larsson
Technical Analyst, Saxo Bank
US 10 year Treasury Note Future has bounced off from strong support at $121. A bounce to $124 is not unlikely. Trend would still be down and selling pressure could resume.
Bigger picture on monthly the Treasury futures has unfolded a big Shoulder-Head-Shoulder pattern reaching 100% of the Neckline to Head distance (illustrated by two blue arrows) AND tested the longer term rising trend line. If the T-Note future breaks below 121 there are no strong support before 117
Euro Bund future is testing lows at €156.22. A price level not seen since 2018. If closing below €156 Euro Bund future is likely to drop down to around €150 possibly lower.
RSI is below 40 threshold for the first time since 2008! Still have one more day of March to move back up above but it is not very likely that scenario will unfold. Euro Bund future is in negative sentiment and is likely to drop further.
However, corrections will occur obviously, and a correction from current level should be expected. A correction of 0.382 Fibonacci at around €162 is not unlikely.
UK Gilt testing key support at £119.60. RSI divergence on Weekly indicates we could see a (minor) correction from here, possibly up to around 125.
The support level at around 119.60 is fairly strong as illustrated on the Monthly chart. The 200 monthly SMA is offering support. However, monthly RSI is below 40 and has been for a couple of months by now with no divergence indicating we could lower levels in coming months. .
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.