In this journey, bears breaking through the pattern that is coupled with the technical indicators to signal weakness.
The price slides below 7 & 21-DMAs in minor trend with crossover and momentum, so the current downtrend likely prolongs on intensified momentum, DMA & crossovers.
Hence, the mild attempts of price rallies have not been convincing as the momentum and trend are in conformity to the downswings (in bears’ favor).
On a broader perspective, the major downtrend that went in the consolidation phase has now resumed streaks again after failure swings at 61.8% Fibonacci levels (refer monthly plotting for lows of 116.837 and highs of 195.883 levels), pattern has occurred at 156.929 and rail-road pattern at 144.165 levels on monthly terms to nudge prices below EMAs and retrace up to 78.6% Fibonacci levels.
We advocated short hedges in our previous write-up on this pair. Had you initiated those positions, you would have arrested the recent swings and kept on risk on the check.
One can still uphold shorts in contracts of mid-month tenors with a view to arresting further potential downside risks. Writers in a contract are expected to maintain margins in order to open and maintain a short position.
Alternatively, on daily trading grounds, at spot reference: 140.402 levels, we advocate constructing tunnel spread, using upper strikes at 141.057 and lower strikes at 139.650 levels. The strategy is likely to fetch leveraged yields as long as the underlying price keeps dipping but remains above lower strikes on the expiration.
Currency Strength Index: FxWirePro's hourly GBP spot index is flashing -37 (which is ), while hourly JPY spot index was at -63 ( ) while articulating (at 05:28 GMT ).