Eurodollar Future – March 2010

Nicole Elliott from Mizuho Corporate Bank at 10/18/09

Comment: Eurodollar futures have proved remarkably resilient despite Euribor ones edging lower and Treasury yields backing up by more than we had expected. Technically this contract is holding in a tiny ‘triangle’ at the apex of a very large ‘wedge’, giving mixed signals. Is in no longer overbought but then again momentumis nil. We shall continue to allow for a small initial dip to trendline support and possibly the Ichimoku ‘cloud’, though note that this might be achieved by creeping sideways across the page.

Strategy: Possibly attempt the tiniest of shorts at 99.405; stop above 99.500. Target 99.320/99.275. Then watch for signs of basing before going long again using a stop below 99.090.