Fixed Income Weekly Technicals

Technical Analysis Research

Fixed Income Weekly Technicals

Thursday, 14 September 2017

Weekly Outlook and Technical Highlights Analyst Analyst Axel Rudolph Karen Jones +44 207 475 5721 +44 207 475 1425 [email protected] [email protected]

For important disclosure information please see end of document. research.commerzbank.com / Bloomberg: CBKR / Research APP available

Technical Analysis Research | Fixed Income Weekly Technicals

Current Technical Views on EUR and US interest rates Shading denotes highlights

Market (click to see chart)

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Bund Futures:

Market has tested and held below the 163.56 high and we look for more of a sell off.

German 10Y Yield:

Sells off to and recovers from 55 week ma

EU 10Y Swap:

Recovery off the 55 week ma leaves it well placed to test the .872/.8858 resistance

Bobl Futures:

Third failure at the 131.95/98 zone points to the market having topped

EU 5Y Swap:

Market has reversed from the 55 week ma at 0.13 and we look for the yield to recover further

Schatz Futures:

Has topped ahead of the 2017 highs 112.31/32.

EU 2Y Swap:

Holds the -0.21 78.6% retracement

EU 2-10Y Swap Curve:

Has stabilised ahead of the 200 day ma, rally should struggle circa 1.05.

EU–US 10Y Swap Spread:

Narrowed to Fibo resistance at -1.2445. We look for the spread to fail between here and the 2008-2017 downtrend at -0.2042, but looking for that to hold.

10Y Bund Asset Swap Spread

Easing lower

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Current Technical Views on EUR and US interest rates Shading denotes highlights

Market

View

Italy 10Y Yield

Has sold off towards the June low and pivot at 1.86/1.83 and the recovery from here suggests that it will head back into its range.

Italy/Spain 10Y Yield Spread

Italy/Spain 10Y yield has recently broken down from a rising wedge. The long term target from wedge is approximately 20.00/25.00. It will remain directly under pressure while capped by the 55 day ma at 55.04

Spain 10Y Yield

Well placed to retest the 6 month downtrend at 1.622

Credit ITRAXX 5Y Europe Index:

Continues to glide towards the July low at 50.61 which is expected to soon give way to 47.24.

ITRAXX 5Y Crossover Index:

Drop below the June low at 226.71 voids our bullish view and instead points to 223.00/218.25.

ITRAXX Senior Finan. Index:

Declines towards the July low at 48.29 below which lurks a Point & Figure target at 40.50.

CDX IG CDSI GEN 5Y Index:

Slips back to support at 55.73/62 which we expect to soon give way; will then eye 55.20/54.88.

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Shading denotes highlights

Current Technical Views on EUR and US interest rates Market

View

US 10Y T-Notes:

Formed another top at 128-035 and targets the 126-10/125-29 area while it caps.

US 10Y Yield:

Continues its descent towards the psychological 2.00 mark around which it should level out.

US 10Y Swap:

Rallies from its September low at 1.97 which we believe to be a significant trend turning point.

US 5Y Swap:

Rally from the current September low at 1.68 has further to go; targets 1.93/96 next.

US 2Y Swap:

Recovered from the April and June lows at 1.48/47 and should soon exceed the 1.68 July high.

US 2-10Y Swap Curve:

Dropped to and then rapidly widened from the psychological .50 level; targets .57 and above.

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Europe

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December Bund Futures Market has tested and held below the 163.56 high and we look for more of a sell off. Bund Equalised Daily Chart Near term outlook – we look for further failure: Bund futures have reached the 163.56 September 2016 high and reversed from here. While below here we will expect another down leg to be made. The market has eroded the 20 day ma at 162.13 on the December contract and this should trigger a slide to the 160.50/31 mid August low and 55 day ma. Failure here will retarget the 158.53 late July low. Longer term bias is negative: Longer term we view the market as a top – initial support lies at 158.53 and failure here will trigger losses to the 155.82 December 2016 low. This is considered to be the last major reaction low. A close below here will confirm that the market is now in a longer term bear trend. This will target 153.67, the 23.6% retracement of the move from 2013.

RSI has diverged on the move to a new high

What if we are wrong? Only a close above the 163.56 2016 high on the continuation chart will target 166.40, the February 2017 high.

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Equalised Active Weekly chart Has halted at the 163.56 September 2016 high Bund Weekly Equalized Continuation Chart High at 163.56

December low at 155.82

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German 10Y Yield Sells off to and recovers from 55 week ma German 10Y Yield Daily Continuation Chart Recent decline has taken it back to the 55 week ma at 0.293 : The German 10Y yield has rebounded from here and while it underpins another up leg towards the 0.619 recent high should be made. The longer term outlook is positive: The market is viewed as having based longer term with the 200 week moving average at 0.618 and the .74 December 2015 high remaining in focus. The overall target is the 0.82 level (estimate by Q2 2018). What if we are wrong? Only below the 55 week ma 0.293 would trigger losses to the April low at 0.15.

Uptrend at 0.336

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German 10Y Yield Looking for the 55 week ma at 0.293 to under pin German 10Y Yield Weekly Active Continuation Chart

200 week ma at 0.618

55 week ma is at 0.293

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EU 10Y Swap Recovery off the 55 week ma leaves it well placed to test the .872/.8858 resistance EU 10Y Swap Daily Chart The swap has stabilised ahead of the 55 week ma at 0.714 and has recovered, directly overhead lies the 55 day ma at 0.872 and the 0.8858 2 month downtrend, this may hold the initial test but once above here we should retest 1.00. Longer term bias is positive: The EU 10Y swap has recently based at .65 and has completed a base pattern at 0.61-0.94. It had held the swap since November 2016. This targets the 1.27 level by the end of Q1 2018/beginning of Q2 2018. Initial resistance is the 1.01 July high and Fibo resistance at 1.06. Where are we wrong? The most recent June ow at 0.71 maintains an upside bias/bull trend. Only below here would neutralise our outlook.

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Seeing a lot of divergence on the move to a new low – reflects a loss of downside momentum

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EU 10Y Swap Side lined between the 55 and 200 week moving averages EU 10Y Swap Weekly Chart

The 200 week moving average at 0.957 provoked a selloff

55 week ma at 0.714

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December Bobl Futures 3rd failure at the 131.95/98 zone points to the market having topped Bobl Daily Continuation Chart The contract has reversed at the 131.96 2017 highs: We note the 2017 highs at 131.95/98 are directly above the market and we also note the TD perfected set up on the daily and this points to failure. This should lead to a retest of the 129.68 July low. The longer term bias is neutral to negative: provided that we remain below the 131.96/98 high. We suspect that the market is building a potential top but this will only be confirmed on a close below the 129.68 July 2017 low.

Where are we wrong? Rallies will find resistance at the 131.95/98 on the equalized chart. While capped here on a closing basis, a negative bias remains entrenched. If not, 133.48 August high and 134.89 the February peak on the continuation chart would be targeted.

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RSI has diverged

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Bobl Equalised Active Weekly Chart Should struggle on approach to the 2017 highs at 131.96. Bobl Equalised Active Weekly Chart 2017 highs at 131.96

Supports at 129.67/68

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EU 5Y Swap Market has reversed from the 55 week ma at 0.13 and we look for the yield to recover further EU 5Y Swap Daily Chart Near term outlook we are looking for the yield to stabilise: The EU 5Y swap has sold off to and recovered from 0.13, the 55 week ma and the June low at 0.112. The marker has based down here as expected and the break above the short term channel suggests further near term strength to the 200 day ma at 0.229.

200 day ma at 0.229

Key support below 0.11 lies at the 0.06/.04 zone. The longer term bias is positive: We favour recovery to the 0.344 July high and the 200 week ma at 0.346. Where are we wrong? Only below zero we will be forced to abandon our upside bias longer term (this is not favoured).

Complex divergence of the daily RSI

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EU 5Y Swap Rebounding from the 55 week ma at 0.13 EU 5Y Swap Weekly Chart



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December Schatz Futures Has topped ahead of the 2017 highs 112.31/32. Daily Continuation Chart We believe that the market has topped at 112.285. The market has reversed ahead of the April high at 112.32 and now it has eroded the 2 month uptrend. We look for failure at the 20 day ma at 112.17 and the 55 and 200 day ma at 112.01/111.97, which guards the 111.82 2013-2017 uptrend.

13 count points to failure

20 day ma at 112.17

The longer term outlook has a negative bias: Failure at the 2013-2017 uptrend at 111.82 on a weekly closing basis will be needed in order to confirm that the market has topped from a longer term perspective (favoured) and we are heading initially to the 111.75 23.6% retracement then the 111.46 the November 2016 low (on the equalised continuation contract). Where are we wrong? Only above 112.32 will introduce scope to 112.75/77 (highs on the continuation chart).

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Weekly Equalized Continuation Chart Stalling at the 2017 highs at 112.31/32 Weekly Equalized Continuation Chart February and April highs were made at 112.31/32

Uptrend at 111.82

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EU 2Y Swap Holds the -0.21 78.6% retracement EU 2Y Swap Daily Chart The market has sold off to and so far reversed from the -0.21 78.6% retracement. Around here the swap is still expected to stabilize. We should then see a recovery to the 200 day ma at -0.152 and the -0.115 25th April high. This, together with the 14th November peak at -0.11, will act as the barrier to the -0.07 March peak. Longer term outlook is neutral: We view the market as side-lined -0.194/-0.069. But the recent weekly close below -0.19 has weakened the longer term upside bias, we will neutralise here. Where are we wrong? A weekly close below the June low at -.194 would negate our longer term upside bias and trigger losses towards. This is the last defence for the 0.25 July 2016 low.

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Holds the -0.21 78.6% retracement

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EU 2Y Swap Spike below strong support at -0.19 has been short lived EU 2Y Swap Weekly Chart

Good support sits at -0.19

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EU 2-10 Swap Curve Has stabilised ahead of the 200 day ma, rally should struggle circa 1.05. The EU 2-10 swap has sold off towards and recovered ahead of the 200 day ma at 0.949. We suspect that rebounds will struggle circa 1.05 the December high and we suspect that the market will remain capped by 1.10/1.12 (July peak). Below the 200 day ma at 0.949 lies the 200 week ma at 0.908 and the 55 week ma at 0.873. Above the 1.12 July peak will target Fibo resistance at 1.17. Please note that we suspect that the market has topped at 1.120.

EU 2-10 swap curve – daily chart

Stabilising at the 200 day ma at 0.949

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EU 2-5Y Swap Curve Consolidating at the 200 day ma at 0.3340 EU 2-5Y Swap Curve Daily Chart

200 day moving average is at 0.3312

The EU 2-5Y swap curve has sold off to and recovered from the 200 day ma at 0.3340 and the base of the channel at 0.3373. What is interesting is that the current daily Elliott wave counts are implying that this rebound will remain tepid and is likely to terminate ahead of the 55 day ma at 0.391. Below 0.3340 lies the April low at 0.27, the February low at 0.243 and the December 2016 low at 0.23. .We look for the 0.45 recent high and major resistance at 0.4745, the 2009-2017 resistance line to continue to cap.. 14 September 2017

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EU 10Y- US 10Y Swap Spread Narrowed to Fibo resistance at -1.2445. We look for the spread to fail between here and the 2008-2017 downtrend at -0.2042, but looking for that to hold. The EU 10Y vs US 10Y swap has narrowed to the 61.8% retracement at -1.2445. It is starting to struggle. We look for failure between here and the 20082017 downtrend at -0.2042, but this is not our favoured scenario. Longer term targets are the -1.42 June low and the -1.477 200 day ma. EU 10Y- US 10Y Swap Spread – Daily Chart

Has narrowed to the 61.8% retracement at -1.24450

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EU 10Y- US 10Y Swap Spread – Weekly Chart

200 week ma at 1.2545, 2008-2017 downtrend at 1.2042

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10Y Bund Asset Swap Spread Easing lower The recent spike up to 49.30 was accompanied by a divergence of the daily RSI, this reflected a loss of upside momentum near term and the market is easing lower. Provided dips hold over the 55 day ma at 43.52, an upside bias should be maintained for gains to the 53.93/56.21 band of recent highs. Below the 55 day ma would suggest a revisit of the 37.70 July low. Only below here would it increase the risk of slippage back to the 35.07 200 week ma. Failure here would target the 30.00 mark.

Daily chart

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Italy 10Y Yield Has sold off towards the June low and pivot at 1.86/1.83 and the recovery from here suggests that it will head back into its range.  Near term outlook is on the defensive: The Italian 10Y Yield has sold off towards and recovered just ahead of the June low at 1.86. Directly below here lies the 1.84 pivot and we suspect that the market will hold here and rebound towards the 200 day ma at 2.12. A close above 2.12 will increase the risk of a rally to the top of the recent range at 2.42.

Italy 10Y yield – daily chart

 Where are we wrong? Only a close back below 1.86/1.84 June low and November 2015 high would target 1.73, the 50% retracement of the rally higher from August 2016.  Longer term, we are neutral to positive. This view is maintained above 1.84. The market targets the 2.42 March high eventually – this guards the 2.72 July 2015 high and longer term there is potential for 3.00.

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Italy 10Y Yield Eroding the 55 week ma and there is scope for slippage to the 1.83/84 pivot. Italy 10Y yield – weekly chart

High 2.42

1.83/84 pivot

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Italy/Spain 10Y yield has recently broken down from a rising wedge. The long term target from wedge is approximately 20.00/25.00. It will remain directly under pressure while capped by the 55 day ma at 55.04

Market has already sold off to initial target of 41.23 2014 high. It is currently rebounding from 40.00 by will remain directly offered below the 55 day ma at 55.04

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Spain 10Y Yield Well placed to retest the 6 month downtrend at 1.622 The Spanish 10Y yield is once again poised to challenge the 1.622 6 month downtrend. Dips lower should find some support at 47.00 ahead of the 1.40/1.35 recent lows. Only above 1.622 will allow for a test of the July high at 1.74. The 1.75 April high is the break point to the 1.81 78.6% Fibonacci retracement and the 1.95 March high. Only failure to hold the 1.30 January low would leave the yield very much under pressure to 1.10, the 78.6% Fibonacci retracement.

Daily Chart

Downtrend at 1.647

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Credit

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ITRAXX 5Y Europe Index - Daily Chart Continues to glide towards the July low at 50.61 which is expected to soon give way to 47.24 The ITRAXX 5Y Europe Index’s rejection by the August highs at 59.15/42 is pushing it towards the July low at 50.61 around which it may only short term stabilize.

ITRAXX 5Y Europe Index Daily Chart

We thus abandon our previously held bullish view and believe that a drop below the 50.61 low will be seen within the next few days and weeks.

In this case not only will the psychological 50.00 mark be back on the plate but also the next lower March 2015 low at 47.24. Resistance above the September 1 low at 53.19 and the 55 day moving average at 54.40 comes in along the six month downtrend line at 55.67. While trading below it, immediate downside pressure should be maintained. Only a no longer expected rise above the 59.15/42 August highs would re-instate our previously held bullish view and lead to the May lows at 61.07/18 being in focus. Further up sits the mid-May peak at 65.98.

July low was made at 50.61

In our opinion the current down leg (credit strength) has further to run.

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ITRAXX 5Y Europe Index - Weekly Chart The 59.15/42 resistance area needs to be bettered for the next up leg to be made ITRAXX 5Y Europe Index Weekly Chart

March 2015 low was made at 47.24

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ITRAXX 5Y Crossover Index - Daily Chart Drop below the June low at 226.71 voids our bullish view and instead points to 223.00/218.25 ITRAXX 5Y Crossover Index Daily Chart The ITRAXX 5Y Crossover index continues its decline and has so far slid to its current September low at 225.24, forcing us to abandon our previously held bullish view. We will stick to our now bearish forecast while no rise and daily chart close above the September 6 high, 55 day moving average and the six month resistance line at 238.81/245.96 is seen. Over the coming days and weeks major support at 223.00/218.25 will be targeted. It is made up of the June and September 2014 lows and may offer interim support. We do expect it to give way before the end of the year, however, in which case the 212.00 level will be in focus. It is where a 2 x 3 vertical and horizontal daily Point & Figure can be seen. Further down lies the psychological 200.00 mark. Made a new 2017 low at 225.24

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ITRAXX 5Y Crossover Index - Weekly Chart Nears the 223.00/218.25 major support zone ITRAXX 5Y Crossover Index Weekly Chart

Major support comes in at the June and September 2014 lows at 223.00/218.25

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ITRAXX 5Y Senior Financial Index - Daily Chart Declines towards the July low at 48.29 below which lurks a Point & Figure target at 40.50 ITRAXX 5Y Senior Financial Index Daily Chart The ITRAXX 5Y Senior Financial index continues to decline towards the July low at 48.29 around which it may find short term support. While the index remains below the six month downtrend line, 55 day moving average and September 4 high at 52.33/53.58 immediate downside pressure should be maintained.

We expect to see a drop and daily chart close below the 48.29 level be seen within the next few weeks which is why we have abandoned our previously held bullish forecast. In this case the 0.5 x 3 daily vertical Point & Figure target at 40.50 as well as the psychological 40.00 mark will be in the pipeline. Only a no longer expected reversal and sharp rally to above the August peak at 57.82 would re-instate our bullish forecast and put the June 14 low at 59.69 and the June 21 high at 62.62 then being in the picture. Slightly higher up lies the May low at 64.98. As stated above we changed our forecast from a potentially bullish one to a bearish one with the 40.50/00 region being targeted.

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July low sits at 48.29

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ITRAXX 5Y Senior Financial Index - Weekly Chart Slides back towards the August 2014 and July 2017 lows at 48.84/29 ITRAXX 5Y Senior Financial Index Weekly Chart

Drops back towards its July all-time low at 48.29

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CDX IG CDSI GEN 5Y Index - Daily Chart Slips back to support at 55.73/62 which we expect to soon give way; will then eye 55.20/54.88 CDX IG CDSI GEN 5Y Index Daily Chart The index is sliding back towards the 55.73/62 area, made up of the late July and early August lows. These may offer support for a day or two but are expected to give way.

Recent highs were made at 62.75/99

In this scenario the July and August 2014 lows at 55.20/54.88 will be next in line. Once the 55.20/54.88 support zone has been slid through on a daily chart closing basis, the psychological 50.00 mark will be targeted. Needless to say that we no longer believe that the recent highs at 62.75/99 will be overcome. While resistance between the 55 day moving average and the current September high at 59.14/60.40 caps, immediate downside pressure should be maintained. Only a now unexpected rally above the 60.40 recent high would increase the odds of the 62.75/63.68 resistance area to again be reached. Above it the June and July highs can be seen at 63.32/68. This we no longer expect to see.

July low was made at 55.62

Instead further downside remains on the cards.

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CDX IG CDSI GEN 5Y Index - Weekly Chart Declines towards the July and August 2014 lows at 55.20/54.88 which should soon be reached CDX IG CDSI GEN 5Y Index Weekly Chart

The July and August 2014 lows were made at 55.20/54.88

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United States

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US 10Y T-Notes – Daily Chart Formed another top at 128-035 and targets the 126-10/125-29 area while it caps US 10Y T-Notes Daily Continuation Chart The US 10Y T-Notes’ rise above the June peak at 127-175 was relatively short lived with them trading back below this level at present, having formed a top at 128-035.

Formed an interim top at 128-035

The contract thus fell short of the 128-165/23 resistance area which consists of the March 2016 low, the 50% retracement of the 2016 decline and the breached 2010-17 uptrend line (see page 38). There we would expect it to fail in case if indeed further upside were to be seen. This currently looks to be unlikely, though, with the 55 day moving average and the August 4 and 15 lows at 12610/125-29 being targeted instead. Only if this support area were to be slipped through would the next lower 200 day moving average, May and July lows at 125-135/124-23 be in focus. July low was made at 124-255

Failure at 124-23 would change our once again neutral medium term outlook to a bearish one and put the December and March lows at 123-10/123-005 back on the map. In case of an unexpected rally to be seen, the June and September highs at 127-175/128-035 are expected to cap. . 14 September 2017

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US 10Y T-Notes – Weekly Continuation Chart Formed an interim top at 128-035 US 10Y T-Notes Weekly Continuation Chart Is gunning for the 128-165/20 resistance area

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US 10Y T-Notes – Monthly Continuation Chart Recent corrective up move should fail below the breached 2010-17 uptrend line at 128-23 US 10Y T-Notes Monthly Continuation Chart The 2010-17 breached uptrend line at comes in at 128-23

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US 10Y Yield - Daily Chart Continues its descent towards the psychological 2.00 mark around which it should level out US 10Y Yield Daily Chart The US 10Y yield formed a low at its current September trough at 2.01.

The May and July highs were made at 2.40/42

From there it has risen back to the three month resistance line at 2.20. Between it and the 55 day moving average 2.23 we expect the see some short term consolidation before the current up leg resumes.

Over the coming weeks the seven month resistance line at 2.27 is expected to be bettered with the 200 day moving average and the late July high at 2.33/34 then being back in the picture. Another upside target is the July peak at 2.40, a rise above which would re-instate our medium term bullish forecast and put the March high at 2.63 back in the frame. Slips should find support between the June and current September lows at 2.10/01.

Rapidly bounced off its current September low at 2.01

Unexpected failure at the 2.01 low and the psychological 2.00 level would push the April and May 2016 highs at 1.95/89 to the fore. Further down lies the 61.8% Fibonacci retracement at 1.82..

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US 10Y Yield - Weekly Chart Recovers from its current September low at 2.01 and has probably begun another up leg US 10Y Yield Weekly Chart

Current September low was made at 2.01

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US 10Y Swap - Daily Chart Rallies from its September low at 1.97 which we believe to be a significant trend turning point The US 10Y swap’s drop to the current September low at 1.97 has been followed by a sharp reversal higher. We thus believe that a major low was made at 1.97 and that another long term up leg has just begun.

US 10Y Swap Daily Chart

Above the 55 day moving average at 2.19 the 200 day moving average and the late July high can be seen at 2.27/2.30. Once the next higher July peak at 2.38 has been bettered, our bullish forecast will be confirmed. Slips should find support above or within the 2.08/07 area which contains the 38.2% Fibonacci retracement and the June low. Only if an unexpected drop below the current September low at 1.97 were to be seen, would the 50% retracement and March 2016 high at 1.89/85 be back on the plate.

The September low was made at 1.97

Further down the April and May 2016 lows can be seen at 1.80/1.75.

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US 10Y Swap - Weekly Chart Bounces off the September low at 1.97 US 10Y Swap Weekly Chart

Bounces off the September low at 1.97

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US 5Y Swap - Daily Chart Rally from the current September low at 1.68 has further to go; targets 1.93/96 next US 5Y Swap Daily Chart The US 5Y swap’s recent descent ended at the 1.68 current September low from where another medium term uptrend has begun. The 200 day moving average and late July high at 1.93/96 represent our next upside targets. First, though, some minor consolidation around the 55 day moving average at 1.87 may well be seen. Once a rise above the July peak at 2.05 has been seen, our bullish scenario will be confirmed with the March peak at 2.24 then being in focus. Slips should find support above or around the April, may and June lows at 1.81/1.76. Below the 1.68 current September low sits the December 2015 low at 1.51 and also the March 2016 high at 1.46.

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Dipped to 1.68

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US 5Y Swap - Weekly Chart Stabilized slightly above the 200 week moving average at 1.63 US 5Y Swap Weekly Chart The November 2009 low was made at 2.26

The 200 week moving average comes in at 1.63

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US 2Y Swap - Daily Chart Recovered from the April and June lows at 1.48/47 and should soon exceed the 1.68 July high US 2Y Swap Daily Chart The US 2Y swap revisited the April and June lows at 1.48/47 from which it rapidly recovered. We expect the May and late July highs at 1.64 to be reached within a matter of weeks. There the swap may short term consolidate, though, before pushing on towards the July peak at 1.68 above which the March high can be spotted at 1.74. Still further up beckon the March and August 2009 highs at 1.81/83. Minor support is seen along the 200 day moving average at 1.55 and more significant support in the 1.48/47 region. Further major support comes in at 1.44/41, made up of the January and February lows. While trading above this area we will retain our medium term bullish view.

Reversal occurred at the 1.48 level

Below the 1.44/41 support area lies the 1.30 region. For any kind of possible bullish trend reversal to be confirmed a rise and daily chart close above the 1.68 July high would have to be seen.

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US 2Y Swap - Weekly Chart Remains side-lined within its 2017 triangle but should eventually break out to the upside US 2Y Swap Weekly Chart

2017 triangle

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US 2-10Y Swap Curve - Daily Chart Dropped to and then rapidly widened from the psychological .50 level; targets .57 and above US 2-10Y Swap Curve Weekly Chart The US 2-10Y swap curve briefly narrowed below the 78.6% Fibonacci retracement at .51 to the psychological .50 mark before rapidly widening again. The current September high at .57 is currently being retested and may act as short term resistance. Once exceeded, some further widening towards the Marchto-September resistance line at .61 should be on the cards. For medium term widening to be back on the plate a rise above the next higher mid-August high at .62 will need to be seen. Only if it were to be bettered, would the July peak and 200 day moving average at .71/.73 be back on the plate. Unexpected failure at the .50 level would mean that the next lower .48/.45 area could be reached. It consists of the July 2016 lows.

So far slid to .50

Were this area not to hold the next lower .43/.41 early August and September 2016 lows should do so. The next lower August 2016 low at .39 is not expected to be revisited either..

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Disclaimer In accordance with ESMA MAR requirements this report was completed 14/09/2017 12:40 CEST and disseminated 14/09/2017 12:41 CEST. This document has been created and published by the Research department within the Corporate Clients division of Commerzbank AG, Frankfurt/Main or Commerzbank’s branch offices mentioned in the document. Commerzbank AG is a provisionally registered swap dealer with the CFTC. If this report includes an analysis of one or more equity securities, please note that the author(s) certify that (a) the views expressed in this report accurately reflect their personal views; and (b) no part of their compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or views expressed by them contained in this document. The research analyst(s) named on this report are not registered / qualified as research analysts with FINRA. 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Disclaimer (contd.)

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Any derivative transactions by PRC persons may only be entered into by PRC financial institutions which are permitted to conduct derivatives business in the PRC and have obtained all necessary regulatory approvals in the PRC. © Commerzbank AG 2017. All rights reserved. Version 9.27

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Other technical analysis reports we publish are: Monday:

Daily Market Technicals (FX), Strategic Technical Themes, FX Emerging Markets Technicals;

Tuesday:

Daily Market Technicals (FX), Bullion Weekly Technicals;

Wednesday:

Daily Market Technicals (FX), Commodity Weekly & Commodity Currencies Weekly Technicals;

Thursday:

Daily Market Technicals (FX);

Friday:

Daily Market Technicals (FX), Fixed Income Weekly Technicals.

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Karen Jones

Axel Rudolph

Head of FICC Technical Analysis

Senior Technical Analyst

Tel. Mail

Tel. Mail

+44 207 475 1425 [email protected]

+44 207 475 5721 [email protected]

Zentrale Kaiserplatz Frankfurt am Main www.commerzbank.de Postfachanschrift 60261 Frankfurt am Main Tel. +49 (0)69 / 136-20 Mail [email protected]

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