Although it has made an attempt to bounce back to hold onto the above levels, on an intraday basis it has again broken this level.
On , the prices have slipped below 10DMA that signifies us prolong prevailing sentiments after breaking supports at 81.005 levels.
By formation of “hanging man” pattern on weekly chart which is a clear confirmation for bears, it is maintaining the attitude well below this with leading oscillators to converge downwards.
The oscillator has begun diverging at around 50 levels to the previous rallies (see circled area on weekly charts) which is one more confirmation of potential swings.
Subsequently, remains in overbought territory despite an attempt of crossover, %D line crossover above 80's, this intensifies bears interests in the market, as a result we've seen today's lows at 80.112 to break the above .
Hence, next strong support is seen only at 79.495 levels, if the pair does not manage to hold onto this level that would certainly expose the levels of 78.330 in short term.
Although the pair experiences some bounces, we could see with dubious eyes on Kiwi fundamentals which are not that conducive, as a result, we maintain long term in our opinion.
Due to above technical reasoning, it is advisable to buy binary delta put options at spot FX 80.182 levels for targets 80 and even up to 79.495 levels.
Currency Hedging Strategy: NZD/JPY Short Put Ladder
With current spot FX at 80.198 levels, the strategy takes care of long term basis hedging motives and so far our short side of 1.5% ITM put option with shorter expiry is functioning as per our predictions of upswings in near term and for now we are awaiting the functionality of longs on 15D ATM -0.50 delta put option and one more long position on 1M (-1.5%) OTM -0.39 delta put option.