FxWirePro: AUD/JPY on verge of extending double top at stiff resistance, major trend hovering at 50% fibos – tunnel spreads to trade
Source: FxWire Pro - Technicals / 31 Jan 2018 01:47:18 Eastern Standard Time
Bears on verge of extending double top with top 1 at 89.089 & top 2 at 89.071, as a result, current prices are sliding below DMAs.
For now, more slumps seem to be on cards upon bearish DMA crossover, both leading & lagging oscillators signal weakness to continue.
Well, AUDJPY major trend that was in the consolidation phase from the lows of 72.437 since June 2016 retraced almost more than 50% Fibonacci level. But for now, the bears repeat the history near stiff resistance levels of 90.254. Upswings are hovering at 50% fibonacci levels, thereby, shooting star occurs to signals weakness on failure swings at this stiff resistance.
Momentum in the downtrend on daily terms seems to be intensified as both RSI and stochastic curves are converging to the price dips and on monthly terms, strength is faded away in the previous rallies.
The extension of the rallies only on breach and sustenance above stiff resistance of 89.114-90.254 levels.
But this event seems unlikely in near run as bearish MACD and DMA crossover to substantiate the downtrend continuation.
Contemplating above stated technical reasoning, on speculative grounds we advise buying tunnel spread options strategy, using upper strikes at 88.2020 and lower strikes at 87.505 levels.
As long as underlying spot FX keeps dipping, the strategy is likely to derive exponential yields than the spot movements.
Alternatively, shorting mid-month futures contract are also advocated with a view to arrest downside risks.
Currency Strength Index: FxWirePro's hourly AUD spot index is inching towards 14 levels (neutral), while hourly JPY spot index was at -21 (mildly bearish) while articulating at 06:30 GMT. For more details on the index, please refer below weblink:
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