• FxWirePro: USD/BRL bulls seem satisfied with 38.2% Fibonacci retracements, bears form whipsaws on emas – tunnel spreads to tackle deep tunnels

    Source: FxWire Pro - Technicals / 04 Jan 2018 06:11:40   Eastern Standard Time

    On daily charts, we see stiff resistance at around 3.3346-3.3420 levels where the pair has shown a convincing supply zone in the recent history.

    That is where a resembling evening star pattern has occurred that is pulling back from highs of 3.34 levels.

    Hanging man patterns at 3.3149 and 3.3121 levels are occurred to plummet the prices below 7DMAs. Thereafter, you could see a steep slump upto the current levels of 3.2369.

    However on a broader perspective, in the recent times, it has managed to test the strong supports at 3.2019 (i.e. 38.2% Fibonacci levels on monthly plotting) to bounce back again but upswings are restrained at the same resistance levels.

    Most noticeably, the current price behavior in the major trend goes in whipsaws pattern on 21&7-EMAs & 38.2% Fibonacci retracement levels, the current prices are well below EMAs in this time frame.

    Both leading oscillators (RSI and stochastic curves) have shown indecisiveness on this timeframe but indicate strength and intensified momentum in ongoing selling sentiments on daily terms, historically it has shown the faded strength at the same levels.

    While MACD also signals downswings to prolong further.

    Overall, the major trend has turned into corrective modes for more than two years, ever since shooting star has occurred at peaks of uptrend at 4.0093 levels it has tumbled retrace more than 38.2% Fibonacci levels.

    Trade tip:

    Since, both leading, as well as lagging indicators, are in bears’ favor, deep slumps are most likely. Well, on trading perspectives, it is worth to snap rallies and deploy tunnel spreads using upper strikes at 3.2434 and lower strikes 3.2196 levels where it is likely to test next strong supports.