FxWirePro: GBP/AUD Cushioned at 21-DMA & EMAs To Advance Ascending Channel – Uphold Directional Hedging Portfolios

GBPAUD’s both minor and major trends are spiking through ascending channels (refer both daily and weekly charts).

Momentary bulls, in the minor trend, resume at around 21-DMA level, prior to which the spinning top pattern candlestick to plummeted prices as anticipated (refer daily plotting).

In such a scenario, it should surpass 1.8419 and 1.8498 levels as the key obstacles for more rallies up to 1.8510 level that seems unlikely event in the near terms but possible in the medium-terms as both leading oscillators are bullish bias. But trend indicators are indecisive.

Both RSI and Stochastic curves show upward convergence to the prevailing rallies to indicate the buying momentum.

Contrary to that bearish scenario, on a broader perspective, the intermediate trend also spikes through the rising channel (refer weekly chart), where bulls hold firm at the channel support at 1.7792 level.

Consequently, the current price spikes above EMAs as both leading oscillators signal bullish momentum & lagging indicators are indecisive on this timeframe as well.

Trade tips: One trading grounds, at spot reference: 1.8339 levels, we advocate executing tunnel spread options strategy with upper strikes at 1.8419 and lower strikes at 1.8202 levels, the strategy is likely to fetch leveraged yields as long as the underlying price keeps sliding towards lower strikes on the expiration.

Alternatively, on hedging grounds, at spot reference: contemplating above technical rationale, we advocate initiating shorts in GBPAUD futures contracts of October’19 delivery as further downside risks are foreseen in the short-run and simultaneously, longs in futures of December’19 delivery. 

Thereby, the foreign traders, who are dubious about puzzling swings, can directionally position in their FX exposures. The directional implementation of the same trading theme by further allow for a correlation-induced discount in the options trading also if you choose strikes appropriately.