GILT GUILTGilts are uk goverment 10 year fixed income
They often move inverse to GBPUSD and with the longer dates US treasuries
We have a bottom and some hidden bullish divergence
Let's see how high this goes, targets on chart
Key date is a week tomorrow when the MPC meets and the market is probably expecting a rate hike which would be a negative for gilts
TRADE AT YOUR OWN RISK
Overview
Ideas
UK10YBGBP trade ideas
10-year Gilts 1-day classic patternsQ: What has the highest probability of occurring?
Since early July there have been 4 tests of 132.000 resistance.
There is a combination of 2 classic patterns forming at resistance.
The double top, where both tops have been rejected at 132.000, is currently valid.
The head and shoulders, the head consisting of the double top, would need to break the neckline ~129.750 to become valid.
Both patterns equally project 128.250 as the target.
Objectively looking at the entire base beginning around the high volume bar in February it is curve-like. Looking to the weekly timeframe it is quite possible this is the formation of a cup with the handle to follow.
So there is some conflict in this area which can lead to a large number of market participants getting it wrong and as a consequence more momentum. It is quite probable that market participants have already shorted the double top breakout. Waiting for the head and shoulders to confirm with an ~129.750 neckline breakout before entry is advantageous. Stop placement above what appears to be a right shoulder at ~130.750 yields a 1.5R target.
It would also be beneficial to visualise the 1-week handle as a means of guarding against the 1-day head and shoulder pattern failure.
EURO - Where the money goes!Here you can see where the money from the euro area flows, among other things. Nobody talks about it and the media sell the "EU people" once again for stupid and tell corresponding fairy tales.
The high of the Euro in the third week of February marks the low of 10-year British government bonds.
The first of March low in the euro with 1.2124 marks the blue 1 high and the depreciation of the euro in the last few days can be seen nicely as a circled blue 3.
In my opinion, no solutions can be brought by the ECB, because this central bank is the largest bad bank of all time. Full of government bonds issued by the "South&Western-States", which have no chance of sustained recovery in the corset of the Eurozone, this zombie portfolio will burst with full force.
The only chance to save the EURO for a few more years is the introduction of EURO-Bonds and the Banking Union. This then throws the "German Volkssturm" as the last reserve, with the same outcome as in 1945. The only alternative to Safe your money, in my opinion, is not government bonds but are to be found in the equities segment. However, as the large capitals are focused on bonds, they seek out the most liquid assets such as USofA or UK bonds.
The idea published here serves for the time being as illustrative material and has yet to establish itself.
Greetings from Hanover
Stefan Bode
P.S. Fuck the EU or how did the Victoria Nuland - in the conquest ehm overthrow ehm democratic election of Ukraine by the US - so beautifully 2014 expressed?
UK 10-year Gilts: Still lots of potentialBonds are holding at the minor projection at 121.72. Due to the underlying bearish momentum we expect a continuation towards the much more important targets at respectively 116.82 and 108.90. Note that this latter level is virtually equal to multiple pivots of 2013-2014.
We maintain our strong negative stance versus bonds. Only a recovery above 125<>125.20 can ease pressure. Such a recovery is currently unlikely.
Primary trend: negative
Outlook: negative
Strategy: hold short and/or short-entry bonds
Support: 121.72 / 116.82* / 108.90
Resistance: 123.30 / 125.10+
Outlook cancelled/neutralized: above 125.10
OANDA:UK10YBGBP
Optimal sell at 126.40, a "must" sell below 124.The title and the weekly chart itself tell the whole story.
I really hope for a bounce to 126.40, would be more comfortable to take this short there. But as this is probably one of the best trades for the long term supported by fundamentals too, I would not mind to sell the weekly break below 124 either.