• FxWirePro: AUD/NZD dragonfly doji’s attempts restrained by 21-dmas – trade boundary strikes on range-bounded trend

    Source: FxWire Pro - Technicals / 12 Feb 2019 01:27:27   America/New_York

    Chart and candlestick patterns formed: AUDNZD bulls are attempting to make upside traction in both the minor trend and major consolidation phase. 

    Dragonfly Doji candle has occurred at 1.0485 levels, consequently, bulls attempt to take-off rallies above DMAs, on the contrary, failure swings have been observed at 21-DMAs.

    Any decisive break-out above these levels are likely to bring in more rallies up to the next stiff resistance of 1.0682 levels as both technical indicators signal strength in the current minor trend (refer daily plotting).

    On the flip side, the major consolidation phase that has lasted for more than 4 and a half years is now stuck in the range, bears plummet prices below EMAs on shooting star at 1.0856 levels.

    Both leading and lagging oscillators indicate weakness in the major trend. 

    RSI and Stochastic curves show downward convergence to the downswings that indicate selling momentum (refer monthly plotting). 

    As stated in our previous post, “most likely dragonfly doji pattern candle with no confirmation from technical indicators has brought-in some sort of consolidation just above 1.0548 is foreseen”.

    Trade tips: Contemplating above technical rationale in the near-term, if the prevailing bullish sentiments sustain, then, bulls are most likely to extend further up to 1.0561 levels. Thus, at spot reference: 1.0520 levels, boundary option strategy is advocated on an intraday trading basis, using upper strikes at 1.0561 and lower strikes at 1.0480 levels.

    The trading between these strikes likely to derive certain yields in the non-directional trend in the short term, more importantly, these yields are exponential from spot movements.

    For cash or nothing, these options would be exercised if the forward prices to remain between both strikes (i.e. 1.0561 > Fwd price > 1.0480 levels).

    Currency Strength Index: FxWirePro's hourly AUD spot index is inching towards 43 levels (which is bullish), while hourly NZD spot index was at -95 (bearish) while articulating (at 06:09 GMT). 

    For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex

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