FxWirePro: EUR/JPY 3-black crow pattern conquer over hammer – bid deceptive rallies to trade tunnel spread and short hedge
Source: FxWire Pro - Technicals / 19 Aug 2019 08:08:36 Europe/London
EURJPY has seen mild interim price rallies from 2 days but that appears to be momentary, the trend seems to be absolutely edgy with a renewed weakness for today.
Technical chart and candlestick patterns formed – Hammer pattern candle popped-up at 124.601 levels that held stronger by evidencing mild upswings on monthly plotting, whereas gravestone doji and 3-black crow patterns counter on daily terms.
With steep slumps, 3-black crow pattern has completed at 118.353 level to plummet prices below DMAs (refer daily chart), while the bearish swings have been developing on the breach below the double top neckline, both leading and lagging indicators substantiate weakness.
The intermediate trend also, bearish engulfing evidence price drops below EMAs (refer monthly chart). For now, the current major trend most likely to prolong bearish swings that are backed by both momentum oscillators as both RSI & stochastic curves shows downward convergence to the prevailing price dips that signal bearish strength & the intensified selling momentum and weakness remains intact on the monthly terms.
Trade tips: On trading perspective, at spot reference: 118.027 levels, contemplating above technical rationale it is advisable to snap deceptive rallies and construct tunnel options spread, using upper strikes at 118.198 and lower strikes at 117.524 levels, the strategy is likely to fetch leveraged yields as long as the underlying spot FX keeps dipping but remains above lower strikes on the expiration.
Alternatively, we advocated shorts in futures contracts of mid-month tenors with a view to arresting potential dips, since further price dips are foreseen we would like to uphold the same strategy.© FxWire Pro 2020. All rights reserved. The FxWire Pro content received through this service is the intellectual property of FxWire Pro or its third party suppliers. Republication or redistribution of content provided by FxWire Pro is expressly prohibited without the prior written consent of FxWire Pro, except for personal and non-commercial use. Neither FxWire Pro nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon.