Bunds ignored the double top pattern on the hourly charts and drove higher for 137.00. 60 min charts are overbought, as would be expected, so this morning we look to 137.05 as a guide to direction.
If we cannot make a break above here we see this coming back on a corrective basis with 136.65/60 then the short term objective. Shorts should be covered to these lower levels. We look to re-instate longs here, but we keep tight stops as a break of 136.55 would lead us lower to 136.21/17.
However, we hold this 136.65/60 level and we are back with a chance of coming to 137.05 once more.
Now if on the open we exceed 137.05 go with it for 137/33 possibly 137.48 before we turn and head lower in a correctionary manor.
Bobl:
Bobl continued to gain strength yesterday and once we broke 123.52 we came higher to 124.06. We have closed stronger, but we are entering overbought conditions on the charts, and therefore we need to take care as we have excellent resistance at 124.15 to 124.36 and there is little chance of being able to break and hold above this resistance whilst we are in such overbought territory.
However...that is not to say that we will not be able to break this level after correction...Bobl does look stronger now...and we look to 123.51 to hold the downside.
We would go long at these lower levels and will hold unless below 123.34. If below here we look for 123.03 to hold the downside.
Now after correction we expect another go on the topside and if then we break 124.36 we look for 124.68 then 124.95 early next week.