BTP-Bund Completed Bear Flag Pattern Amplifies Compression Risks
Source: BFW (Bloomberg First Word)
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UUID: 7947283
(Bloomberg) -- Italy-Germany 10y yield spread may embark of a fresh narrowing phase toward 143bps-144bps after resolving a continuation pattern on a daily time frame, Bloomberg technical analyst Sejul Gokal writes.
Alert: HALISTER1- See chart; spread now +2bps at 155bps
- BTP-bund spread validated a bearish ‘flag’ pattern yesterday, which ends the corrective widening move since mid-December and argues for a continuation of the compression trend started late November
- Support at 148bps (100-DMA) and 144bps-143bps ahead of double-Fibonacci support; below here introduces 139bps (200- DMA)
- Back-to-back close above upper end of gap window at 159bps could damp the narrowing momentum, with a move above 170bps required to fully nullify the compression pressure
- NOTE: Sejul Gokal is a technical strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.
Source: BFW (Bloomberg First Word)
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UUID: 7947283