FxWirePro: AUD/NZD forms bullish engulfing, shooting stars to counter, major trend still oscillating in range - Trade boundary binaries and short hedge

Chart and candlestick patterns formed: Bullish engulfing and the frequent occurrences of shooting stars on minor trend (refer daily chart). The swings have been oscillating in the range bounded pattern on the major trend (refer monthly chart).

Bullish engulfing at 1.0620 levels that have propped up the rallies.

Shooting star patterns have occurred at 1.0608, 1.0617, and 1.0623 levels.

As a result of bearish pattern candlesticks, the rallies are restrained below 21DMA and the current prices are hovering at 7DMAs again.

Prior to which gravestone doji and bearish engulfing patterns were formed at 1.0759, 1.0728 and 1.0674 levels respectively (refer daily plotting) and shown their bearish effects.

If the current prices slide below 7DMAs, then expect more dips as the bearish convergence signaled by momentum oscillators on monthly terms.

However, the major trend of this pair has been downtrend that has gone into consolidation phase approximately from the last three years or so.

For now, bearish bias in near-term, a 1.0235-1.1425 range likely to contain.

Whereas in the medium term perspectives, there’s potential for a further decline towards 1.0495 levels, given the recent interest rate and commodity movements have slightly favored the NZD.

Upon failure swings near range resistance, trend back in range, expect the range bounded trend to persist as momentum indicators signal losing strength, current prices slid below EMAs.

Overall, as stated before the resumption of the major downtrend is very well visible, even if you witness any abrupt upswings, that shouldn’t be deemed as panicky buying sentiment.

Instead, boundary binary options strategy is advocated for the intraday speculative trades, use upper strikes at 1.6708 and lower strikes at 1.0599 levels.

Alternatively, deploy short hedge using futures contracts of mid-month tenors with a view to arresting bearish risks below 1.0495 levels.

Currency Strength Index: FxWirePro's hourly AUD spot index is flashing at 32 levels (which is bullish), while hourly NZD spot index was at shy above 159 (bullish) while articulating (at 06:13 GMT). For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex.

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