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Bunds remain constructive after 0.88% breakout - RBS

FXStreet (Łódź) - Dmytro Bondar, Technical Strategist at RBS points out that Bund yields have broken below 0.88% but are expected to remain constructive to 0.63%.

Key quotes

"However, in the near term, a correction is likely, as the price chart saw a Tweezer top and inside session, pointing to a likely price decline to 149.89 (a key Fibonacci level and 20-day MA) and possibly 149.50 and 148.90."

"This would get oscillators out of the overbought region and once support gained at one of the mentioned levels (perhaps 149.90 would see a base, although a dip to 149.50 area may occur), a resumption of the upwards pressure would be expected with re-testing of 152.47 and further extension of the move up to 154.07."

"Overall, cross-asset technical picture suggests the next few days up to a week to see some risk on moves, but they are likely to be followed by another risk off, which is suggested by some risk assets like BTP and DAX, which have formed reversal patterns but are expected to have initial return moves."

"Thus DAX saw a Head and Shoulders triggered with an initial return move to the neckline expected but further decline likely."

United States Reuters/Michigan Consumer Sentiment Index came in at 86.4, above forecasts (84.1) in October

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US: Reuters/Michigan Consumer Sentiment Index rises to 86.4 in October

The US Reuters/Michigan Consumer Sentiment Index grew to 86.4 in October, from 84.6 recorded the previous month, according to preliminary data released by the Reuters/University of Michigan. Analysts expected an decrease to 84.1.
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