From last Friday, the bulls seem to have given up the momentum in the previous uptrend. Ever since then patterns such as , gravestone and candles have occurred at 0.6988, 0.6994 and 0.7017 levels respectively.
Prior to which, the prices were moving in the pattern which is the confirmation of weakness, it has shown the failure swings at the same .
Both leading oscillators have indicated the losing strength and momentum in the previous rallies. But the momentum now seems to be slightly indecisive.
Strong support is seen at 0.6969 levels and stiff resistance is observed at 0.7033-37 levels.
Well, on a broader perspective, the pair forms and pattern candles after the rejection at the stiff resistance of 0.7499, the major trend resumes swings to slide below EMAs after the failure swings at these supply areas (on monthly plotting).
We’ve already stated in our previous post also that this pair pops up with the candles that have now hampered the momentum in the consolidation phase to retrace upto 50% Fibonacci levels that is where the intermediary bulls test supports.
Since it is traced heaps of indications on daily as well as monthly terms, we wouldn’t foresee sharp rallies in the near run.
Thereby, the consolidation phase in the major trend seems to have been exhausted at the stiff resistance of 0.7499 levels and more slumps are likely upto 50% Fibonacci retracements.
Well, contemplating above technical rationale in daily terms, we advocate boundary binary options strategy. Use upper strikes at 0.0.7040 and lower strikes at 0.6983, these leveraged instruments are likely to fetch magnified effects in payoff structure as long as underlying spot FX keeps dipping.
Alternatively, on hedging grounds, we recommend shorting mid-month month as the underlying spot FX likely to target southwards 0.68 levels in the medium run.
Writers in a contract are expected to maintain margins in order to open and maintain a short position.
Currency Strength Index: FxWirePro's hourly NZD spot index is inching towards 45 levels (which is ), while hourly USD spot index was at -69 ( ) while articulating (at 06:36 GMT ).