Europe: interest rates forecasts

 

The daily bar chart highlights the trend of the 10 years Germany rates.

InchCapital Platform – Data Source: Fida

 

In order to better analyze the future trends of the Government Bond 10yr, it is best to focus on the corresponding interest rates. In this way, the technical analyst can access to natural databases without passing of the gap mistakes to the various expiration dates or, alternatively, rectified, possibly perpetual. These historical series give operation levels different from the reality of the future trading for the various expiration dates.

Rates for Germany 10yr – Bond have been in a bearish trend for about 37 years, but last year something is changing. We have registered a closed and confirmed reversal bullish inversion pattern, and a subsequent sideway phase is still underway, which is taking the detection between 0.220 / 0.150 and 0.510 / 0.605

The congestion movement has been going on for eight months and is a prelude to a next upcoming directional phase. Right now the last bullish attempt between the end of June and the first two weeks of July came back, the rates observations have partially covered the bullish last gap between 0.327 and 0.263 (June 28th and 27th). Read more: German Government Bond.

This area is ideal for selling the BUND (December contract) at the first daily closing below 161.69: failing that, the bullish trend can continue up to 163.33. Read more: Euro Bund Future – Dec 17.

 

U.S.A.: probable bullish reversal for 10 year rates.

 

The weekly bar chart shows the trend of the USA 10 years rates.

InchCapital Platform -Data Source: Fida.

 

As regards T-NOTE, however, the outlook is similar although more pronounced in the downtrend phase. We are close to a very important detection area (2.1700 / 2.0850) and therefore it is likely to expect an ascending reaction that will occur at the first observation above 2.181. Read more: USA Gov Bond.

Finally, on the other ten years, BTP, OAT, BONOS and GILT the same considerations apply, namely bearish trend in progress, close significant areas which are able to record prospective ascending reactions. This means in other words that it is possible that the summer rally of the Government 10yr Bond could be close to its natural completion. Take care, therefore, stop profit shall be adjusted day by day to preserve the economic benefits in the process of forming.