Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
Technical Analyst, Saxo Bank
DAX closed yesterday well above the key resistance at around 18,192 and the 0.618 retracement at 18,208.
Strength indicator RSI closed back above 60 threshold indicating DAX is quite likely to move higher in coming weeks.
A bullish move to the 1.382 projection possibly even to the 1.618 projection of the April correction at 18,926 and 19,148 respectively is in the cards.
A daily close below 17,875 is required to demolish the bullish outlook.
EuroStoxx50 is currently testing key resistance at around 5,035 and the 0.618 retracement. A daily close above the index has broken its range trading behaviour and is building an uptrend.
If RSI, already in positive sentiment, is closing back above 60 threshold the bullish trend is further confirmed. That would give upside potential short-term to around 5,200.
The two vertical arrows are indicating the range bound area being shifted higher, which is quite close to the 1.382 projection of the April correction.
A daily close below 4,888 will reverse the bullish trend.