Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
Technical Analyst, Saxo Bank
EuroStoxx 50 is testing key strong support at around 4,888. A daily close below this level is likely to lead to a sell-off down to the gap and strong support area between 4,812 and 4,775.
The strength indicator RSI is still showing positive sentiment, but divergence has been indicating trend exhaustion for several weeks now.
A daily close on the RSI below 40 will confirm the bearish for Eurostoxx50.
A daily close above the key resistance at 5,035 is needed for the index to resume its bullish trend
DAX was rejected for the fourth time at the strong resistance at 18,192 and could slide lower to test key strong support around 17,620.
However, the strength indicator RSI is still showing positive sentiment with no divergence, indicating higher DAX levels are in the cards. But a daily close above 18,192 is needed for that bullish sceanrio to play out
A daily close below 17,620 is likely to push DAX lower to support and gap area between 17,326 and 17,118.