Bunds: Acceleration of rebound likely – Natixis

Natixis Fixed Income Weekly Technical note presents a compelling case in favor of a upside breakout in the safe haven German bunds.

Rationale

Given that daily indicators are upbeat once again and that the weekly stochastic has turned around, risks of a pullback below the support around 161.30-161.50 (lower band of daily Bollinger) have subsided, pointing instead to an acceleration of the rebound. It is therefore likely the contract will break out above 162.70-162.84 (daily parabolic) and head towards 163.60-163.73 (Fibonacci projections) before eyeing the resistance level around 164-164.15 (upper band of daily Bollinger).

If there is a breakout above these last levels, the contract could even rebound higher towards 165.30 (upper band of weekly Bollinger). Supports are located at 162, at 161.76, around 161.30-161.50 and at 160.80. The risk of a pullback below 161.30-161.50 is subsiding. Watch out rather for rebounds towards 162.70-162.84 before 163.60-163.73 and 164-164.15.