Let’s start off with some observations for the Euro Bund.
Looking at the plain weekly chart, we can identify a break of the one-time-framing higher behavior which occurred for several weeks now. The market took out the previous week’s high and low (I will call it an outside week) with the result of a possible change in the overall market context. The market actually did not close below the previous week’s low, therefore we can’t speak of a sure break. Anyway, with some ongoing global tensions we should keep an open mind for any possible surprise in the story. Also, we took out a swing high which could lead the market to a downside rotation in my humble opinion. By the way, the charts are volume based back-adjusted.
On the daily perspective we are already kind of imbalanced to the bearish side. However, a smaller micro balance area prevents the fall continuing. Maybe this will lead to possibly balanced behavior for the next week.
Time to dig into the volume profiles now. The week closed with a double distribution profile. This particularly profile shape can be quite tricky as we can split it into two distributions of balance. Also to be pointed out is the low volume area between these two distributions which is a possible area that the markets “want to fill”. Anyway, in other words, distributions are acceptance areas and the stuff between areas of acceptance are rejection areas. I hope to still have your full attention here, just kidding. The screenshot will tell you more than a thousand words:
As you can see, I’ve pointed out some potential scenarios with the acceptance and rejection areas of the week. I will keep a good eye on the VPOC as possible level of support as well. Obviously, all this depends on where the market will open as only the specialized holy lord of the Bund will know that. However, we are not at the end of this analysis and we have to dig into the daily profiles as well as the daily VWAP to fully grasp the current state of the market.
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