BUND closes above its opening price after recovering from early selling pressure
Euro Bund (BUND) Technical Analysis Report for Jan 20, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, BUND ended Monday at 171.65 losing €0.05 (-0.03%) on low volume. Trading up to €0.09 lower after the open, the 10-year bond managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on January 10th, BUND actually lost -0.32% on the following trading day. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (BUND as at Jan 20, 2020):
Monday's trading range has been €0.24 (0.14%), that's far below the last trading month's daily average range of €0.73. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for BUND. Prices continued to consolidate within a tight trading range between 171.35 and 171.82 where it has been caught now for the last three trading days.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
Prices are trading close to the key technical resistance level at 171.82 (R1). The market ran into sellers again today around 171.76 for the third trading day in a row after having found sellers at 171.82 in the previous session and at 171.80 two days ago.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 171.82 where further buy stops could get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Euro Bund. Out of 285 times, BUND closed higher 54.39% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 66.32% with an average market move of 0.31%.
With four out of the other four Bond Markets closing lower today, the ones that stand out on the negative side are TBOND losing -0.04% and TNOTE10Y closing -0.01% lower. None of the markets managed to end the day in the green. Read more