Gilts key to today's direction is important support at 119.39/35

Daily Forecast - 18 February 2015

Gilts March contract

Gilts key to today's direction is important support at 119.39/35. Although yesterday's action was very negative we are oversold and this is good support, so could still hold today. However be ready to go with a break lower to target 119.20/17 then 119.05/00. Any further losses risk a slide to 118.80/70 then 118.58/55.

Above 119.55 is slightly more positive and can target resistance at 119.72/82. If this does not hold a move higher we may take it as far as 120.04/08. We can try shorts here with a stop above 120.20. Any further gains meet an excellent selling opportunity at 120.38/43.

Gold April Contract

Gold outlook now negative despite being severely oversold. Any recovery meets first resistance at 1213/14 then the 100 day moving average at 1217. If however we manage further gains look for a selling opportunity at 1220/1221. A high for the day is expected here but shorts need a stop above 1224. An unexpected break higher would be more positive and if we were to then hold above 1221 we could target 1228/1229.

A break below yesterday’s low of 1203 targets first support at 1998/97. Be ready to go with a break below 1995 to target 1189/88 and perhaps as far as 1185/1184.

Bund March contract

Bund holding below 158.55 targets yesterday's low at 157.30/29 then the 158.19/11 support area. This is the most important support of the day. Try longs with stops below 158.00. Just be aware that a break lower is a negative signal & targets 157.85/84 then support at 157.77/75. Any longs here need a stop below 157.65 as prices could then collapse further to good support at 157.35/30. A bounce from here is expected and is worth trying longs with a stop below 157.20

Above 158.55 is a bit more positive and targets resistance at 158.80/85. A high for the day is possible here but shorts need a stop above 158.95 to target 159.24/25 then this week's high of 159.36/37 before a retest of all-time highs at 159.50/54. We should struggle here again this week but on a break higher today we target resistance at 159.70 then 159.90. I guess a break higher cannot be ruled out even at these yields & could target to target strong resistance at 160.15/20.

Ftse March contract

FTSE could bounce around between 6800 & resistance at 6847/6849 a little longer today. Again shorts need stops above 6860. Above is more positive for this week & targets 6870/80 then 2014 highs at 6900/6907. Obviously a break & close above here is a positive buy signal & targets 6770.

First support at 6800/95 but below here risks a retest of 2 day lows at 6778/73. Longs need stops below 6765. Be ready to go with a break lower today to target strong short term support at 6750/47. Try longs with stops below 6735. Be ready to go with a break lower again however to target 6720 then very good support at 6705/6700. Buy here with a stop below 6685. A break lower this week however is a sell signal. 6705 should then work as resistance for a move towards 6675/70.