In the interest rate cut game played by Bernanke and Trichet (still to play), the bund future has shown its volatile character. The blu trendline has been forced twice but bund has always bounced back below it. We think that it could be an important resistance because Trichet does not reckon a rate cut would be a good solution for EU well being. Our first support is 116.04 while next resistance is today's high at 117,55. High volatility is still expected.
Since our last analysis Eurex bund future has moved between the blue and yellow trend line, with shorter candles and a decrease in volatility. The potential downside movement is consistent but the yellow line is offering a very solid support. A further movement below this line will potentially be supported at 115.58. Then 115.15 and 114.53. Upside movement will find its first resistance at 116.43.
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