FxWirePro: EUR/GBP Extends Saucer As Bulls Shrugging-Off Gravestone Doji Patterns – Trading & Hedging Setup

EURGBP prices have developed into a mini volatile upper range between 0.9020-0.9000 support and 0.9085/0.9095 resistance. 

Bulls take-off rallies through saucer pattern & currently, shrugging-off gravestone doji patterns. The current price jumps well above 7 & 21-DMAs with bullish crossovers, for now, more rallies seem to be on the cards as both leading oscillators signal intensified buying momentum.

While a clear break of support is needed to open 0.8940 next support and then potentially back to the 0.8865 previous reaction/range lows. Visa versa a push through 0.9085/95 will spin the outlook more positive for a move towards the next resistance region around 0.9185.

On a broader perspective, we are still monitoring the reversal from the 0.9500 highs to determine if it is just a correction before a test of the 2008 highs at 0.9800, or a more meaningful top for a return to the range over 0.8250 ahead of 0.8000-0.7800 (refer monthly chart).

While hammer takes-off rallies above EMAs on this timeframe, bulls in major trend prolong range-bounded trend, both leading & lagging oscillators indecisive.

Trade tips: On trading perspective, at spot reference: 0.9037 levels, contemplating above explained technical rationale, it is advisable to trade boundary option strategy using upper strikes at 0.9080 and lower strikes at 0.8990levels, the strategy is likely to fetch leveraged yields as long as the underlying spot FX remains between these two strikes on the expiration.

Alternatively, long hedges via EURGBP CME futures of June deliveries were activated with an objective of arresting foreseeable upside risks, they have fetched us desirable results so far. We now wish to uphold the same long hedges by rolling over to July expiries.