AUD/USD bearish setup on bearish engulfing patterns
Technical chart and candlestick patterns: AUDUSD’s bearish engulfing patterns at the crucial levels.
At $0.6909 and $0.7042 levels on daily and monthly plotting respectively.
Consequently, these bearish patterns plummet prices below DMAs,
For now, more slumps seem to be likely upon breach below strong supports of 0.6963 levels, while both leading and lagging indicators substantiate these bearish indications (refer daily plotting).
In addition to that, this bearish pattern is coupled with a broader perspective as well: The major trend of this pair has been extending double top formation with breach below neckline and heading towards 3 and a half years lows (refer monthly plotting), bearish engulfing candle followed by shooting star patterns plummet prices well below 7EMA again on this timeframe. Attempts of upswings are restrained below 21-EMA levels.
Both RSI and stochastic curves have signaled faded strength and intensified bearish momentum as these leading oscillators show downward convergence to the prevailing price dips.
While bearish MACD and EMA crossovers substantiate the bearish sentiments indicating the prevailing downtrend to prolong further. Overall, we could foresee no traces of recovery as the Aussie goes vulnerable on fundamental grounds as well.
Trade tips: On trading perspective, at spot reference: 0.6890 levels, contemplating above technical rationale, it is advisable to execute one touch put options strategy with lower strikes at 0.6827 levels, thereby, one can achieve certain yields as long as the underlying spot FX keeps dipping on the expiration.
Alternatively, on hedging grounds, we advocate shorting futures contracts of mid-month tenors as the underlying spot FX likely to target southwards below 0.67 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 -58 levels (which is bearish), while hourly USD spot index was at 74 (bullish) while articulating (at 05:40 GMT). These indices are also conducive for the above short set-up.
At $0.6909 and $0.7042 levels on daily and monthly plotting respectively.
Consequently, these bearish patterns plummet prices below DMAs,
For now, more slumps seem to be likely upon breach below strong supports of 0.6963 levels, while both leading and lagging indicators substantiate these bearish indications (refer daily plotting).
In addition to that, this bearish pattern is coupled with a broader perspective as well: The major trend of this pair has been extending double top formation with breach below neckline and heading towards 3 and a half years lows (refer monthly plotting), bearish engulfing candle followed by shooting star patterns plummet prices well below 7EMA again on this timeframe. Attempts of upswings are restrained below 21-EMA levels.
Both RSI and stochastic curves have signaled faded strength and intensified bearish momentum as these leading oscillators show downward convergence to the prevailing price dips.
While bearish MACD and EMA crossovers substantiate the bearish sentiments indicating the prevailing downtrend to prolong further. Overall, we could foresee no traces of recovery as the Aussie goes vulnerable on fundamental grounds as well.
Trade tips: On trading perspective, at spot reference: 0.6890 levels, contemplating above technical rationale, it is advisable to execute one touch put options strategy with lower strikes at 0.6827 levels, thereby, one can achieve certain yields as long as the underlying spot FX keeps dipping on the expiration.
Alternatively, on hedging grounds, we advocate shorting futures contracts of mid-month tenors as the underlying spot FX likely to target southwards below 0.67 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 -58 levels (which is bearish), while hourly USD spot index was at 74 (bullish) while articulating (at 05:40 GMT). These indices are also conducive for the above short set-up.