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Analysis & Comment  > The Monthly Banker

The Monthly Banker: 10 December 2014

The Long Gilt future has reversed


Government Bond Futures 


US - The previous advance by the Eurodollar future became overbought in October (see high level of the RSI back then), and the rally was capped in that month at 99.755, yielding to a ranging phase beneath that level.  Over the course of the week, valuations have drifted to the lower boundary near the shorter-term moving average.  A sustained breach would leave a small top in place.  Of course, a break under the 200-day MA line would be needed to damage the longer-term uptrend. 

UK - The Long Gilt future has reversed its pullback from the early-December overbought high at 118.25.  Support was encountered at 116.45 and a fall beneath that level would be required to delay a resumption of the uptrend.

Europe - The Euro 10-year Bund contract has extended its compact uptrend.  This follows another short-lived pullback from overbought levels, when support was encountered above the 50-day MA again.  A sustained fall beneath that line would interrupt the upward tendency.

Asia - The Australian 3-year Bondinstrument maintains the uptrend from the September floor.  We would point out though that the RSI remains near overbought levels; and valuations are probing historic resistance at the October 2012 high at 97.75.  Still, a fall under the 50-day MA is necessary to dent bullish sentiment.

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