CyclicalWaves

BUNDs; Ready For Another Sell Off?

Short
FX:BUND   Euro-Bund
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3
The Bund chart tells us that the dreadful events of the past summer might well be repeated. We have an overtly corrective channel starting from June 10th low. The last swing high at November 27th failed to reach the upper area of the channel, warning that the bullish power was diminishing. Later on, this warning was followed by a sharp decline which was magnified by the December 3rd ECB's decisions.

That massive decline has dragged the price towards the lower boundary of the channel. Bulls have little room to defend their 5 month defense line. If the channel is broken followed by a breakout of the 154.8 swing low, we wil expect the price to fall to at least the June lows at 148.16. A decline in European bond prices means an increase in yields which will support rising trend in Euro crosses and a decline in European stock markets.

Good luck,

Cyclical Waves Group

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