FxWirePro: AUD/USD gravestone followed by back-to-back long legged dojis hamper bullish momentum, consolidation phase still robust but edgy at resistance

Chart and candlestick pattern formed: Gravestone & long-legged doji candlesticks and rising channel patterns have occurred on daily plotting. The bullish engulfing pattern on the monthly chart.

Gravestone doji, shooting star and long-legged doji patterns have occurred at 0.8108, 0.8089, 0.8089 and 0.8093 levels respectively that have currently evidenced slumps below DMAs.

Whereas the bulls on monthly terms seem to be shrugging-off these bearish patterns, the current prices well above 7DMAs.

Although more rallies seem to be likely only upon breach of these range resistance levels and jump above EMAs, previous rallies have been little edgy at a stiff resistance of 0.8118 levels (refer monthly chart).

On a broader perspective, the pair has been going through consolidation phase after a massive downtrend. While shooting star evidences considerable slumps from last September, the bullish engulfing pattern has occurred at 0.7801 levels to counter dips, bulls manage to break-out sloping channel & range resistance again, but still the major trend goes non-directional (refer monthly plotting).

Although both leading oscillators (RSI & Stochastic) have constantly been showing upward convergence, momentum seems to be little edgy in overbought territory for now on daily terms.

While both lagging indicators (7 & 21 DMAs, EMAs & MACD) signal extension of bull swings.

Trade tips: Well, on trading perspective, at spot reference: 0.8070, it is advisable to buy boundary binaries using upper strikes at 0.8083 and lower strikes at 0.8040 levels, the strategy is likely to fetch leveraged yields as long as underlying spot FX remains within these strikes on or before the binary expiry duration.

Alternatively, on hedging grounds, we advocate shorting futures contracts of mid-month tenors as the underlying spot FX likely to target southwards 0.75 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 -42 levels (which is bearish), while hourly USD spot index was at 68 (bullish) while articulating (at 06:28 GMT). For more details on the index, please refer below weblink:

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

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