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Technical analysis: Short Sterling
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Short Sterling – March 2009
Wed, Jul 30 2008, 08:06 GMT
by Nicole Elliott
Comment: Suddenly this month some have belatedly woken to the benefits of Gilts, especially the juicy yields on short-dated ones (benchmark two-year peaked at 5.60%). This might explain this week’s jump in Short Sterling futures prices, blindly following where others lead. The thinking is probably wrong, lower Gilt yields caused by a deteriorating economic outlook centred on the financial sector. It does however explain the inversion of calendar spreads. Three and six-month Libor remain stuck at 5.78% and 5.99% respectively in a semi-functioning environment. Therefore the spread between interbank and Treasury yields should widen (three-month Libor say to 200 basis points over ten-year Gilt yields). This futures contract’s break above 94.450 is seen as an ‘extension’ and we are currently watching for a reversal pattern to form on the weekly chart. Then back down to 94.000 at least.
Strategy: Attempt small shorts at 94.550; stop above 94.680. Add to shorts on a daily close below 94.400 and again on a weekly close below 94.200 for 94.000/93.950 short term and probably 93.650 further out.
Published on Wed, Jul 30 2008, 08:07 GMT
Archive
- Short Sterling – March 2009
Published On Wed, Nov 26 2008, 09:56 GMT - Short Sterling – March 2009
Published On Thu, Nov 20 2008, 12:38 GMT - Short Sterling – March 2009
Published On Wed, Nov 12 2008, 09:48 GMT - Short Sterling – March 2009
Published On Wed, Nov 5 2008, 09:27 GMT - Short Sterling – March 2009
Published On Wed, Oct 29 2008, 09:44 GMT
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