FxWirePro: EUR/AUD bears resume at stiff resistance with shooting star and spinning top, major trend wedged in range – Trade debit put spread

EURAUD stiff resistance is seen at 1.5870 - 1.5890 levels. Failure swings are observed in the minor trend at this stiff resistance levels. Shooting star and spinning top patterns are occurred at 1.5834 and 1.5842 levels respectively (refer 4H charts).

Bears likely to drag slumps on these bearish formations, while both leading indicators (RSI & stochastic curves) on this timeframe signal further weakness.

While on a broader perspective, the hanging man pops up at peaks of rallies (at 1.6036 levels ) coupled with the overbought signal by leading oscillators, while long-lasting range-bounded major trend persists (refer monthly plotting).

Although there is bullish rallies are observed in this month, overbought pressures are seen, it alarms bears trying to take over the rallies as the slow stochastic noises with %D line cross over.

Hence, on a trading perspective, debit put spreads are advocated as the selling indications are piling up. So selling an Out-Of-The-Money put option is recommended to reduce the cost of hedging by financing long position in buying In-The-Money Puts.

So, buy 2w (1%) In-The-Money -0.69 delta put option and short 2w (-1%) Out-Of-The-Money put option for net debit.

Currency Strength Index: FxWirePro's hourly EUR spot index has shown 23 (which is mildly bullish), while AUD is flashing at -76 (bearish), while articulating at 06:02 GMT.

For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex