HALISTER1: Bund Futures Range Breakout Brings 166.77 Projection Into Focus

Bund Futures Range Breakout Brings 166.77 Projection Into Focus

(Bloomberg) -- A range breakout yday on the bund future contract offers a measured objective of 166.77, Bloomberg technical analyst Sejul Gokal writes.
  • See chart here
  • Generic contract found good support from 55-DMA and ichimoku cloud (today at 164.42-23) during August consolidation period
    • That support band must be broken to shift sentiment to bearish and revert attention to higher yield environment
  • Interim resistance from Brexit roll-adjusted day high at 166.18
  • Global yields tumbled yday following weaker-than-expected U.S. ISM non-manufacturing data, which further dimmed prospects for a Fed rate hike this month
  • Scope for ECB stimulative action, such as removal of deposit floor for QE purchases and extension of QE beyond March 2017, could catalyze further upside in bunds; see ECB preview here
  • NOTE: Generic contract is roll-adjusted by difference on GFUT
  • NOTE: Sejul Gokal is an technical strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.
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