FxWirePro: GBP/AUD minor trend in sloping channel, major trend in rising channel – Trade One-touch put and directional hedge

GBPAUD prices have been sliding through sloping channel in the minor trend, whereas the major trend has been spiking through the rising channel.

Please be noted that the spinning top pops up at the channel resistance that is coupled with bearish DMA & MACD crossovers to signal weakness (refer daily chart). 

Consequently, the current prices are sliding below DMAs with bearish crossover.

Both leading oscillators (RSI and Stochastic curves) have been signaling the intensified selling momentum.

To substantiate the bearish stance, MACD also shows bearish crossover to indicate downtrend to prolong further. 

While on a broader perspective, hammer pops up at the rising channel support to signal strength in the major uptrend, both leading and lagging indicators signal bullish momentum on the monthly timeframe.

Trade tips: At spot reference: 1.8337 levels, contemplating above technical rationale, one can execute one-touch put options strategy. Such exotic option with lower strikes at 1.8303 levels likely to fetch exponential yields than spot moves. 

Alternatively, on hedging grounds, we advocate directional hedging strategy ahead of the BoE’s monetary policy, signaling no change, we see significantly less upside for GBPAUD in the near term, while the major uptrend remains intact.

Hence, it is wise to initiating shorts in GBPAUD futures contracts of May’19 delivery as further downside risks are foreseen and simultaneously, longs in futures of June’19 delivery. Thereby, one 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.

Currency Strength Index: FxWirePro's hourly GBP spot index is inching towards 25 levels (which is mildly bullish), while hourly AUD spot index was at 62 (bullish) while articulating (at 06:48 GMT). 

For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex