Why it could be looking bright for Euro bond futures
- ECB lowers interest rate again
- Euro bond futures can rise further
- Short-term minor corrections can be seen
By Kim Cramer Larsson
The European Central Bank lowered the interest rate earlier today — again. But how does it look from a technical point of view? Let's have a quick look at the short- and longer-term picture on Euro Schatz and Bund.
In Q2, Schatz broke out of the bearish trend channel it had been trading in 2013, forming a symmetrical, triangle-like pattern this year. It is close to reaching its highest peak in that triangle, which would be the minimum price target, at around 111.
Back in 2012, it was actually a double-top pattern. If we see a close above 111, the bullish move could be extended to around 111.35. RSI is pushing towards overbought but no divergence can be seen.
Euro Bund: Although RSI is in overbought territory there is no divergence on either the daily or the weekly chart, which indicates that Euro Bund can move higher.
Source: Saxo Bank
-- Edited by Kevin McIndoe
Kim Cramer Larsson is a technical analyst at Saxo Bank.