FxWirePro: AUD/NZD technical round up - Trade tunnel spreads for lingering bears and strangle short for laggards

Chart and candlestick patterns formed: The AUDNZD bulls are attempting to make upside traction in both the minor trend and major consolidation phase. 

On daily plotting, the minor trend has been spiking through rising channel pattern. You could easily make out bulls testing support at channel baseline.

Whereas hanging man and shooting star occurred at 1.0963 and 1.0964 levels, these bearish patterns have nudged prices below SMAs (refer 4H chart). 

The current upswings at 1.0933 likely to test major barrier at 7-SMA levels to create bullish traction (refer daily chart), both momentum and trend indicators have been indecisive on this timeframe, whereas, the major trend still wedged in the range. 

The major consolidation phase that has lasted for more than 4 and a half years now stuck in range, both leading oscillators indicate strength in rallies (refer monthly plotting). Overall, some sort of consolidation just above 1.1050 is foreseen, and then a resumption of the multi-month points.

Tunnel spreads: Contemplating intraday bearish sentiments, if slumps breach below 21SMAs, bears likely to extend further upto 1.0919 levels on overbought pressures. Thus, at spot reference: 1.0937 levels, tunnel spread option strategy is advocated on intraday trading basis, using upper strikes at 1.0946 and lower strikes at 1.0909 levels.

The trading strategy likely to fetch yields that would be exponential than spot trades if the forward FX prices remain above lower strikes on the expiration.

Strangle shorts:As you could observe the swings in the major trend have been oscillating between 1.1423 and 1.0333 levels since June 2015, it is wise to deploy (0.5%) out-of-the-money call and (0.5%) out-of-the-money put options of 1m tenor as shown in the diagram. The strategy can be executed at the net credit and certain yields would be derived in the form of initial premium received as long as the underlying spot FX remains between OTM strikes on the expiration. 

Currency Strength Index:FxWirePro's hourly AUD spot index is inching towards 133 levels (which is bullish), while hourly NZD spot index was at 98 (bullish) while articulating (at 07:38 GMT). For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex