- First of all, because of the rising channel top closeness, that suggested that the previous rebound (which began in February the 18th around the 122.50 zone) was about to be exhausted.
- Secondly, because of the presence of the 124.80 resistance, which could exert such a bearish pressure on prices that it could eventually jeopardise that February shy recovery.
- Finally, some short-term leading indicators, such as the Williams and the Stochastic were extremely overbought.
Prices tried stubbornly to go through the resistance of 124.80 for seven sessions. However, the goal was eventually postponed and a correction was brought about.
The subsequent fall has allowed the Bund to gather more bullish allies. As a result, it´s currently rebuilding its rising structure. As the middle-term scenario continues being led by increasing low-prices, the recent fall could have led the German bond to find out a new support in the area of 122.00. From this level, a new rising impulse could start. The next goal would be the next relevant resistance: 125.00.
The recommendation is to open long positions. Stop loss en 121.80.