Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
Technical Analyst, Saxo Bank Group
Summary: AEX25 / NETH25 uptrend in exhaustion mode short-term and a correction is looming. Index has potential to move higher medium- to longer term
AEX25 closed higher last week but is starting to look toppish short-term. RSI (Relative Strength Index) is showing divergence i.e., the RSI values are declining when the AEX Index was closing higher – illustrated by the two blue lines.. That is a warning of an trend exhaustion.
If AEX I closing below the short-term rising trendline it could be hit by a sell-off down to the Gap area 837-831 which is a strong support.
A close below 831 could see the Index being hit by further selling down to 816.
For AEX to extend the uptrend a close above 862. If that scenario plays out there is upside potential to 878.
Medium -term – weekly chart – AEX is in an uptrend. It has reached the 1.764 projection of the Q3 2023 corrective downtrend at 859 but since RSI is still showing positive sentiment and no divergence there is upside potential to the 2.00 projection at 878
NETH25 cfd levels. A break below the lower rising trend line could initiate a sell-off down to 831 key support.
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