FxWirePro: caution for EUR/JPY aggressive bulls by channel resistance, shooting star and hanging man
Source: FxWire Pro - Technicals / 23 Oct 2019 02:11:39 America/New_York
EURJPY intermediate trend has been sliding through sloping channel (refer weekly plotting) although, mild interim rallies are observed currently but that could be deceptive as the minor trend has slid below 7 & 21-SMAs.
The minor downtrend resumes bearish sentiments on shooting star and hanging man formations at 120.862 and 121.084 levels respectively. For now, extension of slumps seem to be most likely as these bearish pattern candlesticks coupled with the current price sliding below SMAs with bearish SMA & MACD crossovers.
The intermediate trend also, bullish engulfing evidences price rallies upto channel resistance but now the upswings appear to be edgy as RSI indicates faded strength at this juncture (refer weekly chart). The failure swings likely to bring in a renewed weakness again. For now, the current trend is perplexing, however, the weakness in the major trend remains intact on the monthly terms.
Trade tips: On trading perspective, at spot reference: 120.527 levels, contemplating above technical rationale it is advisable to snap deceptive rallies and construct tunnel options spread, using upper strikes at 120.710 and lower strikes at 120.239 levels, the strategy is likely to fetch leveraged yields as long as the underlying spot FX keeps dipping but remains above lower strikes on the expiration.
Alternatively, we advocated shorts in futures contracts of mid-month tenors with a view to arresting potential dips, since further price dips are foreseen we would like to uphold the same strategy ahead of ECB’s monetary policy that is scheduled for this week.© FxWire Pro 2020. All rights reserved. The FxWire Pro content received through this service is the intellectual property of FxWire Pro or its third party suppliers. Republication or redistribution of content provided by FxWire Pro is expressly prohibited without the prior written consent of FxWire Pro, except for personal and non-commercial use. Neither FxWire Pro nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon.