FxWirePro Call Review: Maintain short positions in 10-year bund

This is yet another review of our previous call, given out in October last year to short the 10-year bund at the breakout of 162.5 with an initial target of 160 area and subsequent longer term target of 153. The article is available here, http://www.econotimes.com/FxWirePro-10-year-bund-heads-for-a-sell-breakout-367667

In a subsequent article, we have reaffirmed our outlook and also shared our forecast that the spread between the 2-year bund and the 10-year bund would widen over time. That review is available here, http://www.econotimes.com/FxWirePro-Keep-riding-the-bund-short-call-review-397028 . In addition to that, In January, we had called on our readers to go short in 10-year bund and long the German benchmark stock index around 11560.

In our review on 28th February, we warned our readers that our short call in bund is under threat due to election uncertainties in Europe and warned that it might break the stop loss around 168 if the Dutch election turns out in the favor right-wing candidate Geert Wilders. However, that has not happened and thankfully we maintained the stop loss. The 10-year bund reversed course after reaching as high as 166.3

Since our last review back in July, where we reaffirmed our short side commitment, the call faced similar threat due to ongoing geopolitical uncertainties surrounding North Korea. However, the recent price action, in which bund declined from a high of 165.8 after ECB policy meeting in September has given us more confirmation that our call is on the right track. The 10-year bund is currently trading at 161.8 and we maintain our short side outlook with an additional interim target around 155. Here is the list of targets (both reached and yet to be reached.

Reached targets – 160, 159

Pending targets – 158,157.3,155,153, and 151.3

In this article, we once again encourage our readers to have patience with the above calls. But we do acknowledge that the call is taking a much longer time in reaching targets than originally anticipated.

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