AUD/USD Chartpack - Technicals & Trade Setup
AUD/USD double top and bearish engulfing patterns conquer over double bottom and doji patterns:
Technical chart and candlestick patterns: AUDUSD has been sliding through downtrend line in the minor trend. The pair’s recent upswings are exhausted at the stiff resistance levels of 0.7000 – 0.7055 levels, with the occurrence of shooting star at 0.7035 levels (refer daily plotting). The failure swings are observed at this resistance levels coupled with these bearish patterns signal weakness as the current prices remain well below DMAs with bearish crossovers.
In addition to that, this bearish pattern is coupled with a broader perspective: The major trend of this pair has been extending double top formation with breach below neckline and may head towards 1 and a half year lows (refer monthly plotting), bearish engulfing candles followed by shooting star patterns plummet prices well below 7EMA again on this timeframe. Every attempt of upswings is restrained below 21-EMA levels.
Both RSI and stochastic curves have signaled to sell momentum as these leading oscillators show downward convergence to the prevailing price slumps.
While bearish MACD and EMA crossovers substantiate the bearish sentiments and indicate downtrend to prolong further.
Trade tips: On trading perspective, at spot reference: 0.6770 levels, contemplating above technical rationale, it is advisable to execute tunnel spread options strategy with upper striking options at 0.6792 and lower short lower strikes at 0.6740 levels, thereby, one can achieve certain yields as long as the underlying spot FX keeps dipping but remains well above lower strikes on the expiration.
Alternatively, on hedging grounds ahead of RBA’s monetary policy, we advocate shorting futures contracts of mid-month tenors as the underlying spot FX likely to target southwards below 0.66 levels in the medium run. Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position.
Technical chart and candlestick patterns: AUDUSD has been sliding through downtrend line in the minor trend. The pair’s recent upswings are exhausted at the stiff resistance levels of 0.7000 – 0.7055 levels, with the occurrence of shooting star at 0.7035 levels (refer daily plotting). The failure swings are observed at this resistance levels coupled with these bearish patterns signal weakness as the current prices remain well below DMAs with bearish crossovers.
In addition to that, this bearish pattern is coupled with a broader perspective: The major trend of this pair has been extending double top formation with breach below neckline and may head towards 1 and a half year lows (refer monthly plotting), bearish engulfing candles followed by shooting star patterns plummet prices well below 7EMA again on this timeframe. Every attempt of upswings is restrained below 21-EMA levels.
Both RSI and stochastic curves have signaled to sell momentum as these leading oscillators show downward convergence to the prevailing price slumps.
While bearish MACD and EMA crossovers substantiate the bearish sentiments and indicate downtrend to prolong further.
Trade tips: On trading perspective, at spot reference: 0.6770 levels, contemplating above technical rationale, it is advisable to execute tunnel spread options strategy with upper striking options at 0.6792 and lower short lower strikes at 0.6740 levels, thereby, one can achieve certain yields as long as the underlying spot FX keeps dipping but remains well above lower strikes on the expiration.
Alternatively, on hedging grounds ahead of RBA’s monetary policy, we advocate shorting futures contracts of mid-month tenors as the underlying spot FX likely to target southwards below 0.66 levels in the medium run. Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position.