6 months ago
German 10-year bund forming "higher-for-longer" pattern: analysts
Investing.com - Macquarie has issued a technical analysis on the German 10-year bund, identifying a long-term "higher-for-longer" pattern forming within the 2.00-3.00 range.
The investment bank noted in its September 2 report that the downward movement in German bonds since 2007 completed a five-wave pattern that ended in March 2020, followed by a significant rally.
Morgan Stanley highlighted that in January, the upside reached its target of the triangle pattern but failed to exceed the downtrend resistance line that has been in place since the historical top in 1981, in the 3.00-3.10 range.
The analysis revealed that a pullback phase lasted three months, reaching its lowest point in June near the 200-day moving average, with the market subsequently confirming a minor bullish rectangle pattern.
Morgan Stanley projects that the bullish rectangle pattern has upside potential that could reach the high posted this year at 2.90, with 2.30 serving as a pivotal level in the current trading range.
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