German Bund Future: Back to neutral

The flight to ‘safety’ from Southern Europe into Northern Europe is in full swing, causing significantly higher Bund prices (same development in NL and to a much lesser extend in GB). The intraday outlook has turned bullish even though the upside is littered with resistances from 162.05 up to 163.50. Here the cloud and trend line of 2016 coincide.

Due to the current market dynamics a break higher is rather likely, opening the road to 165.50 and the old pivots at 168.85. We see the rally as a precautionary move and do not see it as an inherently stable/profitable investment and will not invest on the buy-side. For pure trading, risk/reward is too unfavourable.

  • Near term trend: positive
  • Long term trend: neutral/negative
  • Outlook:┬ástrong recovery, choppy, uncertain
  • Strategy: avoid
  • Support: 160.20 / 158.25 / 157.65
  • Resistance: 162.05 / 163.50 / 165.50 / 168.85+
  • Outlook cancelled/neutralized: n/a

420-minute intraday chart

10 MAY 2018

The longer term trend remains quite bearish but the near term trend is only moderately negative and quite mature. In other words, we do expect lower levels on the longer term, but some sort of consolidation on a 1-3 month horizon is relatively likely. Certainly not a chance to go long or expect a major reversal, but things could become too choppy to hold excessive shorts.

Prepare to cover (all or some) if 160.32 is taken out as intraday resistance.

  • Primary trend: negative
  • Outlook:┬ámature down trend, moderately negative
  • Strategy: hold-short with trailing stops (>160.32)
  • Support: 159.40 / 157.60 / 155.20-
  • Resistance: 160.32 / 160.85 / 164.03
  • Outlook cancelled/neutralized above 160.32

420-minute intraday chart