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Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
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Technical Update - BEL20, CAC40 and SMI20 broken bullish. DAX and AEX25 still range bound
Kim Cramer Larsson
Technical Analyst, Saxo Bank
DAX/GER40 has broken above its very short-term falling trendline but is still below key resistance at around 16,060
RSI is still showing negative sentiment on RSI, and with the 55 and 100 Moving Average slightly declining the underlying trend sentiment is bearish.
If DAX is closing above 16,060 a move to July peak around 16,500 is likely.
It can be a struggle however, with the two Moving Average acting as a ceiling. It could be a struggle for DAX to penetrate.
If closing below key support at around 15,482 there is downside risk to around 15K.
AEX25/NETH25 is bouncing from key strong support at around 730 and is close to be testing strong resistance at around 750. A close above is needed for some upside traction.
However, upside potential is limited even if AEX is closing above 750. Limit is probably at around 760 level.
The 55 Moving Average has broken below the 100 Moving Average while they are both declining thus forming a Death Cross (not the most reliable one though since the two Moving Averages are too close to each, they are both considered medium-term Moving Averages. Ideally it should be a short Moving Average crossing over a much longer Moving Average. Nevertheless, it is a bearish indication)
If AEX is closing below 730 a swift sell-off down to around 716-710 support is likely
However, upside potential is limited even if AEX is closing above 750. Limit is probably at around 760 level.
The 55 Moving Average has broken below the 100 Moving Average while they are both declining thus forming a Death Cross (not the most reliable one though since the two Moving Averages are too close to each, they are both considered medium-term Moving Averages. Ideally it should be a short Moving Average crossing over a much longer Moving Average. Nevertheless, it is a bearish indication)
If AEX is closing below 730 a swift sell-off down to around 716-710 support is likely
BEL20/BELG20 has broken above resistance at around 3,696 and seems to be building a bullish trend. However, BEL20 is still below 200 Moving Average and more importantly RSI hasn’t closed above 60 threshold just yet which is needed for uptrend confirmation.
If RWSI does close above 60 there is BEL20 upside potential to 3,825-3,850
A close below 3,630 and BEL has reversed to downtrend. First indication of that scenario to play out would be if RSI is failing to close above 60 followed by the Index closing back below 3,696
CAC40/FRA40 Index jumped higher this morning and is currently trading above resistance at around 7,405. A close above and an RSI close above 60 will confirm bullish trend in CAC40
An uptrend that will have potential up to test July peak at around 7,526, possibly higher.
If CAC40 is sliding back below 7,405 the bullish picture is in jeopardy SMI20/SWISS20 closed yesterday above its upper falling trendline in the triangle like pattern.
If SMI 20 is closing above resistance at around 11,173 the Index is likely to move higher towards July peak at around 11,400, but further upside could be seen.
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