The bear potential of the UK Gilt
14 April 2010
The Technical Trader's view:
Monthly chart
The market's pull back from the double failure gained great bear momentum when the Prior High at 116.08 the completion level of a Double Bottom proved not to be a support of consequence.
Weekly chart
Note too, the Continuation Head and Shoulders pattern that completed at the end of 2009.
The market has dithered beneath that level. (Possibly forming a continuation Triangle?)
But the Neckline has certainly proved to be good resistance.
Yet, on the other hand, the bears will note the potential support from the Prior High at 112.57. Look closer.
DAILY Jun 10 CHART
The price action has been deceptively sideways since the middle of February.
Note the repeated bounce off the emphatic Fibonacci at the 113.50 level.
Note too, the importance of any breach of that level - that would complete a Head and Shoulders Top which would send the market on down hard - certainly with sufficient impetus to send the market on down through 113.57.
Watch the price action of the next few days carefully....
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