HALISTER1: Bund-UST Spread Narrowing at Key Juncture as Exhaustion Flagged

Bund-UST Spread Narrowing at Key Juncture as Exhaustion Flagged

(Bloomberg) -- Bund-UST 10-year spread contracts to -195/-194bps, a level that may not give in so easily given the technical significance and potential exhaustion warnings from trend-reversal tools, Bloomberg technical analyst Sejul Gokal writes.
  • See chart here
  • Bund-UST spread widening Wednesday to -199bps after fading against the -194/-195bps resistance -- the 50% retracement of the entire post-Trump election widening and the 2015 low
  • Candle session study, showing a “candle session” count 11 (9-13 are typical trend reversal numbers)
    • Past ‘11’ counts in Jan. 12 and March 1 accurately presaged spread top/bottom followed by short counter- trend moves
  • A daily spread close back below -198bps would begin to lend credence to a tactical top at the aforementioned levels
  • Should resistance give way, next narrowing target seen at -187/-185bps (200-DMA, 61.8% Fibonacci)
  • NOTE: Click here for today’s technical, options and positioning monitors
  • NOTE: For more detail on G-10 technical levels, click here
  • 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

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

To de-activate this alert, click here
To modify this alert, click here

UUID: 7947283