• FxWirePro: EUR/JPY tumbles on failure swings at stiff resistance – trade tunnel spreads as hanging man, engulfing and Doji patterns signal more weakness

    Source: FxWire Pro - Technicals / 23 May 2018 03:08:15   America/New_York

    Chart and candlestick pattern formed – Failure swings are observed at the stiff resistance of 131.371 levels, while the momentum and trend indicators signal more weakness (daily charts).

    Hanging man, Bearish engulfing and Gravestone doji patterns have occurred at 135.394, 133.278 and 132.259 levels respectively that hamper sustenance above 61.8% Fibonacci retracements, both leading & lagging indicators signal weakness (refer weekly plotting).

    While intraday bearish sentiments can be encouraged upto next strong support at 129.532 and 129.235 levels.

    Whereas the bulls in the major trend cushioned at 128.929 levels and bouncing back, the hanging man followed by bearish engulfing patterns hamper sustenance above 61.8% Fibonacci retracements of Dec-2014 highs (monthly plotting).

    Both leading indicators (RSI and stochastic curves) on this timeframe show downward convergence that signals bearish strength and momentum.

    Trade tips: On trading perspective, at spot reference: 129.775 levels, it is advisable to buy tunnel spreads using upper strikes at 130.043 and lower strikes at 129.235 levels, the strategy is likely to fetch leveraged yields as long as underlying spot FX remains between these two strikes before the binary expiry duration.

    Alternatively, deploy shorts in futures contracts of mid-month tenors with a view to arresting potential dips.

    Currency Strength Index: FxWirePro's hourly EUR spot index is flashing at -25 levels (which is mildly bearish), while hourly JPY spot index was at 108 (highly bullish) while articulating at 06:48 GMT. For more details on the index, please refer below weblink:

    http://www.fxwirepro.com/currencyindex

    The above indices are also conducive to the intraday trading strategy as advocated above.

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