Forex Flash: Gilts find optimism in long-term view – RBS

In the aftermath of the weekend events, Gilts continue to look less attractive, however a weekly inside session on candles suggests a recovery in the long-term. According to Technical Markets Strategist Dmytro Bondar at RBS, “The MACD weekly histogram also shows a positive divergence with the price action. The 114.58 retracement level (50% of the 2012 extremes) proved to be a good support and the range of 114.60-116.60 remains in place with a good chance of recovery towards 117.80 if the latter is broken.”

On the downside, “if a break of 114.58 occurs, it will trigger a move to 114.00 and 113.14, however our bias remains in place for a range of 114.60-116.60 to be in place in the near-term and later upside breakout to 117.82.” he recommends.