FxWirePro: AUD/JPY bears shrug-off gap-up and hammer patterns – Offload directional hedge and uphold short hedge on bearish engulfing

AUDJPY stiff resistance is 79.911 levels and strong support is at 77.468 levels.

The bulls, in the minor trend, have attempted to gain upside traction upon gap up open yesterday at 79.063 levels. On the contrary, failure swings have been observed at the stiff resistance of 79.911 levels. For now, more slumps seem to be on cards only below DMAs.

Hammers have occurred at 75.414 and 78.289 levels, where strong support is seen at 77.468 level.

While the major trend has been consolidating, the bearish engulfing pattern at 77.254 level drags price slumps below 7EMAs, while hammer pops-up at 79.160 levels, attempts to counter major downtrend. But for now, bears shrug-off this bullish candle as both the trend indicators (EMA & MACD crossovers) signal weakness, while both RSI signals bearish momentum & stochastic curves signal mild bullish momentum (refer monthly chart).

Trade tips: On trading grounds, at spot reference: 78.832 levels, it is wise to trade tunnel spread, using upper strikes at 79.399 and lower strikes 78.217 levels.

Alternatively, we had advocated directional hedging shorts in AUDJPY futures contracts of May’19 delivery for the major downtrend. 

Currency Strength Index: FxWirePro's hourly AUD spot index is inching towards 14 levels (which is mildly bullish), while hourly JPY spot index was at -76 (bearish) while articulating (at 11:06 GMT). 

For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex