German Bund futures March contract
The big picture: the dominant pattern here is the big bearish head and shoulder completed at the end of December last year followed by a triangle consolidation in January broken to the downside at the end of January. Lately the Bund futures have struggled to find sellers below 141.5 staging a big bullish reaction with a big green up candle last week...when lower prices can't attract volume the market usually look for volume the other way around and that lifted the price around 142.5 (the same level of the last bearish breakout): here the market looks balanced with buying interest below 142 and selling interest above 142.5 in the region of the last triangle consolidation. Yesterday we had an Inside Day and today so far we have an inside day of an inside day ahead of the ECB decision.: expect a big move in the direction of the breakout from this inside-inside pattern.
The ECB decision itself does not seem to be a reason of uncertainty and big moves but watch for the press conference and pay attention to what mr Draghi has to say about the following two points:
1-He will deny any wrongdoing on the MPS bank affair when he was the head of the BOI: if he is persuasive it is a buy, if he is not it is a sell
2-He should not talk of the exchange rate: if he concedes to the politicians pressure to talk down the Euro it is a sell (the Bund likes a strong currency) if he resists it is a buy.
In any case get ready for some fun after the last couple of boring days in the Bund!
For what it's worth here is my channel chart:
German Bund futures March contract hourly chart
Bund continuous daily chart with planetary lines at important planetary support/resistance area
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