The pair has shown steep slumps ever since the failure swings at the stiff resistance of 1.2580, 1.2760 and 1.3203 levels (refer ).
has occurred at 1.2250 (on ). Consequently, the minor trend spikes above DMAs with and DMA crossovers.
Both and curves show upward convergence to the prevailing price rallies that signal the buying momentum in the interim uptrend.
While on a broader perspective, is traced out at 1.2154 (on monthly chart) that extends major downtrend and retraces 88.6% Fibonacci level sentiments as per our previous anticipation from the April’2018 highs as both leading and lagging indicators on this timeframe are in tandem with the selling.
Both and curves, on this timeframe, show downward convergence to the prevailing price slump that signals the intensified selling momentum.
The and crossovers also substantiate major downtrend that is most likely to prolong further.
Trading tips: On trading perspective, at spot reference: 1.2227 levels, contemplating above technical rationale, it is advisable to execute boundary spread options strategy with upper strikes at 1.2375 and lower strikes at 1.2150 levels, thereby, one can achieve certain yields as long as the underlying spot FX keeps dipping below lower strikes on the expiration.
Short hedge: Alternatively, on hedging grounds, long-term investors are advised to maintain short positions in contracts of mid-month tenors. The writers of the contract are expected to maintain margins in order to open and maintain a short position.