Halister News

(Bloomberg) -- Italy-Germany 10-year yield spread at risk of fading all of today’s widening, with charts pointing to potential compression toward 151-153bps Fibonacci support in days ahead, Bloomberg technical analyst Sejul Gokal writes.

• See chart; spread now +6bps at 169bps; orderly moves noted with initial widening contained inside last week’s range
• BTP-bund formed a bearish key week reversal last week against Brexit vote-day wide, which alleviates near-term widening risks
• Friday’s low may initially come into focus at 160bps
• Daily MACD stays bearish; retains its bearish crossover, arguing for tightening bias in BTP-bund spread
• 151-153bps represents the 55-DMA and 61.8% Fibonacci of Oct. 25-Nov. 28 widening phase
• Spread resistance from 180bps (today’s high 179bps), 61.8% Fibonacci of Nov. 28-Dec. 2 tightening move and Nov. 29 marabuzo line
• NOTE: Dec. 2, ECB-Inspired Bund Selloff Lacks Endorsement in Momentum

• 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.