• FxWirePro: AUD/USD buzzing bears form shooting star in falling wedge, double top in rising channel - trade double touch put and short hedge on mounting bearish sentiments

    Source: FxWire Pro - Technicals / 19 Mar 2018 02:47:03   Eastern Standard Time

    AUDUSD chart and candlestick pattern formed: Minor trend slides through falling wedge and intermediate trend spikes through rising channel.

    Back-to-back shooting stars pop-up at wedge resistance (refer daily chart). These bearish patterns appear at 0.7859 and 0.7876 levels followed by bearish candles with big real bodies and shown steep price slumps. While double top pattern with top 1 at 0.8125 and top 2 at 0.8135 levels has occurred in rising channel (refer weekly plotting).

    Bears for test wedge baseline, more dips likely on selling momentum and breach below these levels.

    Most noticeably, consecutive shooting star and bearish engulfing patterns have evidenced considerable price slumps well below DMAs.

    These bearish patterns are coupled with bearish MACD crossover & overbought pressures from leading oscillators signals continued weakness.

    No traces of even mild rallies are observed today on RBA’s monetary policy minutes, the stiff resistance is seen at 0.7720 and 0.7775 levels.

    On a broader perspective, the pair that has been going through consolidation phase after a massive downtrend, where the double top formation seems to be resuming major trend again.

    While both leading oscillators (RSI & Stochastic) have been showing constant downward convergence, momentum seems to be in bears’ favor.

    While both lagging indicators (7 & 21 EMAs & MACD) signal extension of bearish swings.

    Trade tips: Well, on trading perspective, at spot reference: 0.7920, it is advisable to buy double touch put options using strikes at 0.7650 levels, the strategy is likely to fetch leveraged yields as long as underlying spot FX keeps dipping on expiration.

    Alternatively, on hedging grounds, we advocate shorting futures contracts of mid-month tenors as the underlying spot FX likely to target southwards 0.75 levels in the medium run.

    Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position.

    Currency Strength Index: FxWirePro's hourly AUD spot index is inching towards -114 levels (which is highly bearish), while hourly USD spot index was at 31 (bullish) while articulating (at 06:30 GMT). For more details on the index, please refer below weblink:

    http://www.fxwirepro.com/currencyindex.

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