Bunds bounced yesterday as expected and the Dec contract came back to the 50% short term fib located at 131.76. We have closed towards the highs of the day, and therefore this morning if we can make a break above 131.76 we should look for further strength with 132.22 then targeted.
Here buyers would once more look to cover...they will only come back into the market if we can make a break above here. A break above 132.22 leaves 1232.37/40 then targeted.
However if we cannot make a break above 131.76 we are liable to pullbacks with 131.40 the targeted area. On dips to these lower levels we should be able to see buyers come forth. However once more they will not hold below 131/40 as a break below here sees 131.06 to 131.00.

Bobl came higher off 120.69 reaching 121.32. We are slightly overextended on the topside in the short term, so we may well see a small retracement early in the session to unwind this scenario.
121.11/08 offers support and if we cannot hold above this region we should look for the sellers to take us lower once more with 120.90 to 120.84 then looking to be the likely target.
Buyers are expected to come in at these lower levels and we would expect this support to hold.

Resistance is at 121.32/36. If we climb above this point then we are looking at the buyers taking us higher for 121.62/65 where we would expect the rally to peter out.

Gilts reached our target of 124.66/70 which capped as predicted.
We will need to beat resistance here at 124.70/74 today for a continued recovery to 125.02/04. If we manage to break through this resistance area then look for bulls to chase 125.24/30 as the next target.
However if we hold below 124.40 then bears will grow in confidence as they pressure for 124.19/15. Below 124.00 there is a small gap to fill down to 123.83 and this will be quite important today. Failure at 123.83 could lead to prices drifting back towards 123.59/52 and perhaps another test of Friday's lows at 123.37. Buyers may try attempting longs here adding down 123.25 but below 123.20 activates stops as this signals further losses with 122.71/68 the next target.