DeMark indicators suggest that the recent rally of the GBP 2-year swap rate is likely to exhaust in the short-term, according to Tim McCullough at Lloyds Bank. The rally from 0.55% in April last year should re-test 1.17% completing a TD Sequential 13 pattern. Targets after that are 0.71%-0.99%.
Peter Lee at UBS looks at the relative performance of the key stock markets and sectors and how the S&P is performing in relation to the business cycle, the secular bull market and the cycle of market psychology.
The long-term trend remains intact for S&P500 although there is a medium term, horizontal correction now taking place, but EUR/USD is set for potentially significant losses says Maxime Viemont’s team at BNP Paribas.
Eurodollar futures still have upside potential to go says Michael Sacchitello at Stone & McCarthy. Last week, The COT report showed large speculator net short bets on 3-month Eurodollar futures at a record 1.56 million contracts, however, potential upside remains from a technical perspective.
EUR/USD has finally reversed direction and is set for sharp declines, according to Walter Zimmermann at United-ICAP. The currency may find support at the trend line originating from the July 2012 low – around 1.3470 by the end of June. If this line is broken, the minimum target would be 1.2180.
Yann Cordier, fund manager at AXA Investment Managers, explains how best to use rising and falling wedge patterns as part of a technical trading strategy.
The 10-year Treasury yield has found support at 2.5231 and is set to rise further in the months ahead according to analysts at 4Cast. This level is the October 2013 low and consolidation since then should lead to further gains beyond 3% around Q3 of this year.
Following the downward correction in GBP/USD, sterling is set to retest last week’s high at 1.6904, according to Max Knudsen at ADS Securities. Since the rally from March low, any dips have usually attracted buyers meaning that targets for the next rally are 1.6904, and beyond that, 1.6998.
The rally in the iShares MSCI All Countries World Index Fund since the low of March 2009 looks to be approaching a top based on Fibonacci ratios, says Edward Loef of Loef Technical Analysis.
30-year bond yields are finding support but will have further to fall, according to Chris Williams at Newedge Societe Generale. This means there will be a better time to initiate long positions for the US and European bonds.
