AUD/USD Chartpack - Technicals & Trade Setup
AUD/USD bears resume at wedge resistance with shooting star in minor trend, bulls test support at channel base in major trend:
Chart and candlestick pattern formed: Minor trend slides through falling wedge and intermediate trend in rising channel.
Shooting star and Gravestone doji patterns have occurred at wedge resistance signal weakness (see circled area), more dips seem to be likely only on the breach below 7DMA and the intensified selling momentum (refer daily chart).
These bearish patterns appear at 0.7751 and 0.7767 levels, yesterday a bearish candle with the big real body has shown steep price slumps.
While double top pattern with top 1 at 0.8125 and top 2 at 0.8135 levels has occurred in rising channel, where bulls have now tested supports at channel baseline (refer weekly plotting).
Most noticeably, these bearish signals are coupled with bearish EMA and MACD crossovers & overbought pressures from leading oscillators signal continued weakness on this timeframe.
Bears seem to breach 21DMA for now, as the current prices gaining bearish traction after sliding below 7DMA.
On a broader perspective, the pair that has been going through consolidation phase after a massive downtrend, where the double top formation seems to be resuming major trend again.
While both leading oscillators (RSI & Stochastic) have been showing constant downward convergence, momentum seems to be in bears’ favor.
Trade tips: Well, on trading perspective, at spot reference: 0.7714 levels, it is advisable to buy tunnel spread (which is binary version of debit put spread strategy) using upper strikes at 0.7731 levels and lower strikes at 0.7685, the strategy is likely to fetch leveraged yields as long as underlying spot FX keeps dipping but remains above lower strikes on expiration.
Alternatively, on hedging grounds, we advocate shorting futures contracts of mid-month tenors as the underlying spot FX likely to target southwards 0.74 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.
Currency Strength Index: FxWirePro's hourly AUD spot index is inching towards -24 levels (which is mildly bearish), while hourly USD spot index was at 117 (bullish) while articulating (at 05:59 GMT).
Chart and candlestick pattern formed: Minor trend slides through falling wedge and intermediate trend in rising channel.
Shooting star and Gravestone doji patterns have occurred at wedge resistance signal weakness (see circled area), more dips seem to be likely only on the breach below 7DMA and the intensified selling momentum (refer daily chart).
These bearish patterns appear at 0.7751 and 0.7767 levels, yesterday a bearish candle with the big real body has shown steep price slumps.
While double top pattern with top 1 at 0.8125 and top 2 at 0.8135 levels has occurred in rising channel, where bulls have now tested supports at channel baseline (refer weekly plotting).
Most noticeably, these bearish signals are coupled with bearish EMA and MACD crossovers & overbought pressures from leading oscillators signal continued weakness on this timeframe.
Bears seem to breach 21DMA for now, as the current prices gaining bearish traction after sliding below 7DMA.
On a broader perspective, the pair that has been going through consolidation phase after a massive downtrend, where the double top formation seems to be resuming major trend again.
While both leading oscillators (RSI & Stochastic) have been showing constant downward convergence, momentum seems to be in bears’ favor.
Trade tips: Well, on trading perspective, at spot reference: 0.7714 levels, it is advisable to buy tunnel spread (which is binary version of debit put spread strategy) using upper strikes at 0.7731 levels and lower strikes at 0.7685, the strategy is likely to fetch leveraged yields as long as underlying spot FX keeps dipping but remains above lower strikes on expiration.
Alternatively, on hedging grounds, we advocate shorting futures contracts of mid-month tenors as the underlying spot FX likely to target southwards 0.74 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.
Currency Strength Index: FxWirePro's hourly AUD spot index is inching towards -24 levels (which is mildly bearish), while hourly USD spot index was at 117 (bullish) while articulating (at 05:59 GMT).