Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
Technical Analyst, Saxo Bank Group
AEX 25. 712 is a key support for AEX after the Index bounced a second time in a few days. If AEX can close above 739 the Index has put the downtrend on pause. A close above 747 and the trend has reversed to an uptrend.
If sellers come back in to push AEX25 back below 712 and takes out 710 there is great likelihood they will succeed in extending the downtrend to support at around 688
NETH25 opened just below support at around 712 only for buyers to lift it higher. NETH25 could test 734. A close above 740 will reverse the downtrend short-term and if NETH25 can close above 55 daily MA the road towards previous peaks is paved.
BEL 20 has bounced from below the support at around 3,569 touching the 0.618 retracement at 3,534.
At the time of writing the Index has formed Hammer like candle. If the day ends doing that (drawing a Hammer candle) it indicates a likely bottom and reversal. That could be short-lived however. If closing above 3,569 the Belgian Index could enjoy a nice rebound higher towards strong resistance at around 3,700. A close above 3,747 the Index has reverse the short-term downtrend to 3,800-3,820.
CAC 40 is in a downtrend after closing below support at around 6,946 last week. Trying to get back above today. If CAC can move higher to close above 7,105 the Index has resumed uptrend.
A close back below 6,946 is likely to push the Index lower towards 6,600-6,400
FRA40 cfd has bounced from the 0.618 retracement and is at the time of writing back above 6,945. A close above 7,105 will reverse the current downtrend and FRA40 could eye all-time highs around 7,400. A close back below 6,944 is likely to give sellers renewed energy and extend the down trend towards 6,600. Strong support at around 6,383
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