Amid this journey we see 21DMA has crossed over 7DMA on and it is dragging towards next support at 1. 5103 levels, we think bears taking absolute control from here onwards as there is no signs of strong buying indications from both leading and lagging indicators.
Both leading oscillators converging downwards to these price dips:
RSI: Currently, (14) on both daily and weekly charts, converging downwards to the prevailing price dips.
Stochastic: This leading oscillator is approaching oversold territory with %D crossover to signal bears are in absolute control. Daily stochs still evidences %D crossover even below oversold zones, while on weekly chart %D crossover at 65 levels conforms to these price dips with intensified selling momentum.
also signifies the ongoing downtrend to prolong further.
Hence, we would foresee euro on weaker side on the back of last week's poor German IFO business climate at -105.7 which is a decline from previous 107.3. So, it is foreseen that pair to slip towards 1.5105 levels shortly.
So, the trading recommendation would be good to go short in near march 2016 contracts fior a targets upto 1. 5103 . The short position is also used by a traders to lock in a trading price of a FX that he is going to sell in the future.
Please be noted that as the expiry period approaches, the price converges to the spot FX of EURAUD .
To initiate this short position margin requirement is needed, Initial Margin % would be the % of amount required to trade in any contract. Lesser the of the pair, lesser is the initial margin and higher the leverage benefit and vice-versa.
Here ATM of the pair is flashing at 14.95% and implied of ATM contracts of 1M expiries are at 15.11%, you may have to spare aside higher margins to initiate this short position.