Wed’s renewal of demand for Bunds extended yesterday. This move to new contract highs and, importantly, yields of 1% kept prices ‘hugging’ the top of a positive Keltner channel. However in muted trading the early upside was not maintained and prices closed virtually unchanged. That fact reflects investor indecision but intraday studies are move negative and indicate scope for a more significant, deeper, correction.
Given the counter trend nature of the call,caution must be applied but there is scope for a reaction back to 149.57 and 149.32.