#Euro-Bund - looks that we can go up!#Euro-Bund is on support.. looks like `W` formation.. In this moment it's nice place to take a risk and take long with that stock.
Bunds
German 10-yr Bunds at key support, bullish divergence on intradaGerman 10-yr Bund prices dropped to rising trend line support coming from June low and July low.
Prices are attempting a rebound form the rising trend line support and the odds of a solid rebound are high, if we take into consideration the bullish price RSI divergence on the hourly and 4-hr chart. Even the MACD is suggesting the bearish momentum has run out of steam.
Possible rebound in Bund (drop in yields) suggests we may be in for a more pronounced bout of risk aversion in the financial markets.
EURUSD Bears Waking UpThe wave picture has gotten fuzzy over the past 24 hours. I am beginning to lean more towards today's high as a 'B' wave which suggests a mutli-hundred pip sell off is on the horizon.
If it develops, I'll adjust the labels on the chart when counts get eliminated.
Note the divergence on RSI...that is also indicative of B waves and ending waves.
On a side note, German Bunds found support at a 4 year trend line today. The EURUSD has been running in the opposite direction of Bunds. So if Bunds are supported, EURUSD is likely capped.
IF...and that is a big IF...Bunds crack and break lower through support, we'll likely see the EURUSD scream higher. I think we eventually receive this scenario...but not yet. So as the EURUSD corrects lower, there'll be a spot where EURUSD can be bought in anticipation of Bunds cracking down and EURUSD beginning a big up trend.
We'll keep an eye on the 1.10-1.11 area for clues. 1.0815 likely holds up.
DAX down on German yields and rising EURUSDPlease leave me your comment whether you agree or disagree so we can open an discussion or if you like the chart just simply like it. Thank you for your feedback.
Rising EURUSD and Bunds yields are not helping DAX to pick up momentum and gather some bullishness. As price recently broke through the support at 11200 next target could easily be 10800 (618 Fib) followed by test at 10400 which is also 50 Fib level from previous long term bullish move.
Where To Look For An End To Bund Rout?The support area in the rectangle has some unique characteristics that makes it a good place to expect the recent Bund sell-off to halt:
1- Trendline
2- 50% Retracement
3- Change of Polarity zone
Until that area, I don't see any reliable support on the chart and expect the Bund price to keep falling.
Good luck,
Ali Sharifazadeh, CFTe
