Forex Flash: Spanish and Italian 10y both on the rise – RBS (Barcelona) - According to Dmytro Bondar, a Technical Analyst at RBS, “As expected, the Italian 10yr has formed an inverse head and shoulders pattern after rejecting the 4.94% level (the 150% Fibonacci projection from the Dec’11 rally), which suggests higher yields for the week targeting 5.31%/5.38% onto 5.53%, on the caveat of a sustained break below 4.93%.”

Furthermore, “The Spanish 10yr bonds seems to be forming a double-bottom movement with targets of 6.35% continuing towards 6.50%. We look for a sustained break below 5.54% to cancel this view. Additionally, we recommend setting up shorts as market entered our selling region of 5.56-5.70% targeting 6.05% onto 6.35% and 6.50% on a stop as a sustained break below 5.50%.” he suggests.