While Europe continues to moan about cheap steel (while acknowledging that it will take three to six months for improved wholesale prices to feed through into balance sheets), steel rebar prices in Shanghai last week managed one of their best weekly closes this year, ending just over the psychological level of 2,500 yuan per tonne and above the 50 per cent retracement resistance. The lagging line also broke well above the top of the cloud 26 weeks ago and the trend channel. The only thing still missing in this strong bullish picture is for moving averages to cross to bullish, which looks imminent, especially when we rally to Fibonacci resistance at 2,684 yuan. We continue to target a squeeze to April’s high of 2,800 to 2,900 yuan.