Eurodollar Future – March 2010

Nicole Elliott from Mizuho Corporate Bank at 11/06/09

Comment: Investors appear to be as happy now with five-year TNotes as they are with two’s, so benchmark yields look set to test the pivotal 2.25% level. Front Eurodollar and Fed Funds futures have again inched up to new contract highs though the European cash market is as dead as a dodo. Technically this contract has broken above the top of a ‘triangle’ at the apex of a very large ‘wedge’, moving averages and the Ichimoku ‘cloud’ are still very much in bullish mode. It ought to follow-through to the upside but as we approach 100.00, and if year-end pressures loom, be careful.

Strategy: Attempt small longs at 99.545, adding to 99.485; stop well below 99.450. Upside target 99.650.