A "dragon fly" is traced out at 0.7227 levels which is at the troughs of the downswings.
We kept urging for our targets 0.7648 as well as 0.7502 from last couple of weeks, which are very well achieved by now.
Now on the verge of retesting the lows of 0.7209 levels (61.8% Fibo, see ) and 0.7170 upon breach of this 61.8% fibo retracements.
Currently, it is now testing support at 0.7209 levels, upon breach of this level then we could see more pressures again.
is formed at 0.7484 levels to slip below DMAs.
On , 7DMA crosses well below 21DM that signals selling pressures.
After 2 days of upswings in AUDUSD , exactly at the highs of 0.7401 levels (yesterday’s highs) the pair has rejected resistance at 7DMA, as a result we get to see downswings today.
While, and noise with strong momentum to signal selling pressures as they are converging to the current price dips.
Major downtrend restrain below 21EMA: As rallies are constrained at 21EMA on weekly chart, that is where bulls have halted and turned around to resume business to signal major trend continuation (see weekly charts).
Considering last three months rallies, as leading oscillators diverge to these previous rallies, some sort of scepticism arise owing to the recent Fed’s funds rate and RBA’s rate cut.
Well, on delivery basis, go short in near month contracts for targets at 0.7209 or below.
Alternatively, if the pair manages to break below 0.7209 levels, then keeping the above technical factors in mind, it is advisable to go long in 1M (1%) OTM 0.36 delta call while writing 1W (1%) ITM call with positive theta and delta closer to zero (both sides use European style options), this credit call spread option trading strategy is recommended when the gold spot price is anticipated to drop moderately in the near term and spikes up in long term.
Trade expects that the underlying gold spot price would drop to ITM strikes on expiration and thereafter bounce back again.