FxWirePro: EUR/USD Triple Bottom Pattern Intensifies Renewed Bullishness, Major Downtrend Still Intact – Trading & Hedging Setup

EURUSD’s renewed bullish phase from 1.0727 extends through 1.12 levels. Those lows are from where triple bottom pattern has occurred. Triple bottom (bottom 1 at 1.0768, bottom 2 at 1.0727 & bottom 3 at 1.0766 levels) and jump above 100-DMAs bring-in renewed bullishness, while both leading & lagging indicators are also in line with these upswings.

The next major resistance zones are observed at the 1.1250 & 1.1305 areas. If we head straight up to that region, we would expect it to at least cap the short-term move. Intra-day support lies in the 1.1198 region. A decline through there suggests a lower highs on most probable overbought pressures. However, within the 1.0635-1.1495 range has developed for a re-test of 1.0990 pivot support.

On a broader perspective, bulls are on the verge of 3-months highs, while the major downtrend still remains intact below 50% Fibonacci retracement levels (refer monthly chart), we still await confirmation of whether 1.0635 was a more significant low for a move up to and through 1.1495, or whether price action between these levels is merely a correction phase before an attempt to test parity. Both leading & lagging oscillators seem to be indecisive but bearish bias on this timeframe.

Trading tips: At spot reference: 1.1215 levels (while articulating), although we could see some ongoing rallies for today, contemplating intraday selling sentiments, one can execute boundary options strategy. Such exotic option with upper strikes at 1.1257 and lower strikes at 1.1133 levels likely to fetch exponential yields than the spot moves. The strategy can get assured yields as long as the underlying FX remains between these two strikes.

Alternatively, we recommended shorts in EURUSD futures of July’20 delivery for the major downtrend ahead of ECB monetary policy meeting that is scheduled for today, we now wish to uphold these positions on hedging sentiments.