Market Economics | Interest Rate Strategy - BNP PARIBAS ...

Germany 10y: Within MT falling wedge testing key 2.789/2.849 MT Trend: Down Range: 2.78/3.00
Decisive break below key 3.093 (October
2.576 3.208 => 3.243
low & October/April MT trading range low
boundary), opened MT way down towards
2.73 target area with 2.849 (2009 low)
tested, next support being MT falling support
line at 2.789
It is now on a key support area (2.789/
2.849) & a failure to break it down could
allow a technical rebound towards 3.068
(38.2%). However, we need now a break
above 3.171/243 to turn again negative on a
MT basis.
The bias will now be neutral but supportive
between 2.79/2.85 & 3.17/3.24
Tech Snapshot
- Below key 3.093 (October low)
- Within MT falling wedge & ST channel
- 2.849 (2009 low) tested
Strategy: Waiting now for a bearish signal
to enter short. Bullish will keep long below
3% but could already take at least some
profit on 2.80/85 area.
UK 10y: Will stay supportive within the channel. Watch LT rising wedge support MT Trend: Toppish Range: 3.75/3.92
Break above 4.084 (June 09 top & wave “A”
top) in February strengthened the MT rising
scenario towards 4.50 theoretical target area
but return seen below it weakened MT rising
scenario with fall close to critical 3.791 (LT
rising wedge sup) . A break now below it is
the main risk for 3.618 (LT 50%) initially
A break above ST falling channel (4.004) is
needed now to reopen the ST way up even
though a renewed break above 4.084 (wave
“A” top) and then 4.105 (61.8%) is needed to
rekindle the MT rising scenario
3.456 4.302
Tech Snapshot
- Within ST falling channel
-Testing LT rising wedge support
Strategy: Wait for a ST falling channel
break to re-enter short.
S&P: Top reversal done on key 1228 with break below ST rising channel MT Trend: Consolidative Range: 1130/1190
1150 (wave “3” top) breakout strengthened
the rising wave “5” scenario towards potential
1111 ⇐ 1132 ⇐ 1150/53 –!– 1228 ⇒ 1278 ⇒ 1330
1325 target but it stalled just below key 1228
(LT 61.8%) with a top reversal printed
Break below ST rising channel & now daily
Head & Shoulders neckline (1180) turned ST
study consolidative & gave a first corrective
signal now to develop a ST technical
correction towards key 1153/55 (38.2%+ LT
rising channel sup) initially & on a breakout
1132 and 1111 (50, 61.8%).
Tech Snapshot
- Close to LT rising channel support
- Topped below key LT 61.8%
- Break below ST rising channel
- Top reversal printed
Strategy: Keep short if you are below 1185
for 1130/50
Christian Sené 7 May 2010
Market Mover, Non-Objective Research Section
59
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