HALISTER1: iTraxx Snr Financial CDS Approaching Possible Fade Area at 96bps

iTraxx Snr Financial CDS Approaching Possible Fade Area at 96bps

(Bloomberg) -- iTraxx Europe Senior Financial CDS index now widening for third day, fast approaching the double-moving average zone at 96bps where the move may abate, Bloomberg technical analyst Sejul Gokal writes.
  • See live chart here; CDS index (CBIL source) now at 96bps, 13bps wider since late January as political uncertainty drives higher cost of financial protection
  • 100/200-DMA’s at 96bps
  • Additional resistance at 97bps, the halfway point of November-January tightening phase and then head-and- shoulders measured objective at 99bps
  • Momentum is firming with MACD trying to settle above zero, which keeps the widening theme in play, even as tactically, CDS spread may contract against aforementioned resistance
  • Rise in cost of protection over past month led by 3 French banks, with CDS widening on average 15bps (or +0.8 z-score)
  • 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.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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