Something is not pricing correctly here!
If German 10y Bund is trading at -16 bps (-0,16 %) yield, it must be pricing some serious collapse of European economy, or it is traded as a DEM proxy, which means the Euro should trade a lot lower. But Euro is not trading any lower.
Also 10y US vs Bund spread should tighten further. Real Money investors will start selling the negative yielding Bund and buy more Treasuries even though US yields at historic lows too.
But nowadays it is very hard to see what is fundamental macro, and what is due to Central Banks' market manipulative policies with clearly no exit strategy. For this reason just watch the technicals and go with the changing flows.
Daily:
- Ichimoku Bullish, with Price around all time highs. Seems a bit overbought int terms of distance from Kijun and Senkou B lines as equilibrium levels.
- Heikin-Ashi candle is bullish, but haDelta/SMA3 shows negative divergence. Price is getting close to a possible a wedge top. I don't think there is a lot more upside here.
4H:
- Bullish Ichimoku with supports at 166,50 and lower at 166 +/- (Kumo zone)
- Another wedge. We can call it a steeper 4H wedge within the daily wedge.
- haDelta! Serious negative divergence here! Also we have a cross down of haDelta/SMA3! What is left here? 50-100 pips up?
- EWO also shows some form of negative divergence.
Bund futures can see a heavy reversal and quick selloff below 4H Tenkan Sen and the wedge.
If you are long, time to get out / reduce positions.
If you are looking to short, get ready! 165,50-166,00 retracement will be possible in case.
If German 10y Bund is trading at -16 bps (-0,16 %) yield, it must be pricing some serious collapse of European economy, or it is traded as a DEM proxy, which means the Euro should trade a lot lower. But Euro is not trading any lower.
Also 10y US vs Bund spread should tighten further. Real Money investors will start selling the negative yielding Bund and buy more Treasuries even though US yields at historic lows too.
But nowadays it is very hard to see what is fundamental macro, and what is due to Central Banks' market manipulative policies with clearly no exit strategy. For this reason just watch the technicals and go with the changing flows.
Daily:
- Ichimoku Bullish, with Price around all time highs. Seems a bit overbought int terms of distance from Kijun and Senkou B lines as equilibrium levels.
- Heikin-Ashi candle is bullish, but haDelta/SMA3 shows negative divergence. Price is getting close to a possible a wedge top. I don't think there is a lot more upside here.
4H:
- Bullish Ichimoku with supports at 166,50 and lower at 166 +/- (Kumo zone)
- Another wedge. We can call it a steeper 4H wedge within the daily wedge.
- haDelta! Serious negative divergence here! Also we have a cross down of haDelta/SMA3! What is left here? 50-100 pips up?
- EWO also shows some form of negative divergence.
Bund futures can see a heavy reversal and quick selloff below 4H Tenkan Sen and the wedge.
If you are long, time to get out / reduce positions.
If you are looking to short, get ready! 165,50-166,00 retracement will be possible in case.
