With the start of the second quarter, the bunds entered an ascending medium term channel and trading within it as shown on the daily chart above. 
The bund recently hit this channel’s resistance and rebounded normally where the last downside wave is considered a correctional move for the last incline which started from the support for the ascending channel at 127.36 to the recorded top around 134.72.
The 38.2% correction was strong support to the upside were the bunds are to retest the breached 23.6% at 132.98 before resuming the downside wave towards 130.18.
Several factors support our expectations for the bearish wave to continue starting from the 50 MA which is acting as the short term ceiling, alongside Stochastic which lingers in overbought areas, and also trading within the ascending channel and reaching its resistance areas as we mentioned above.
The medium term trend remains to the upside as far as we do not witness a clear breach below 130.18 – 129.70.
By: Yasir Mubarak
Senior Technical Analyst
yasir.mubarak@ecpulse.com
www.ecpulse.com