FxWirePro: NZD/USD Short Setup by Snapping Deceptive Rallies on Back-To-Back Shooting Stars

Technical Chart And Candlestick Patterns: NZDUSD has formed back-to-back shooting stars at 0.6914 and 0.6890 levels that plummet prices below 7-DMAs. For now, extensions of slumps seem to be most likely upon on intensified selling interests signaled by both leading oscillators on the daily timeframe.

Previously, bulls have attempted to counter last December month’s bearish pressures ever since the formation of the hammer at 0.6691 levels (refer daily chart). 

Both RSI and Stochastic curves show shrinking momentum in the previous interim uptrend and indicate overbought momentum.

On a broader perspective, although the interim bulls attempt to bounce but restrained at 21-EMA levels (refer monthly plotting), While bears likely to extend further on the triple top formation.

Observe steep slumps below EMAs on a breach below the neckline on this timeframe, this reminds us of the major downtrend as both leading and lagging indicators are still bearish bias in the major trend.

Trading Tips: At spot reference: 0.6857 levels, contemplating above technical rationale in order to participate in the current uptrend but not to buck the major trend, those who are aggressively looking at this pair are advocated to trade boundary options with upper strikes at 0.6938 and lower strikes at 0.6885 levels. 

Alternatively, for those we foresee the long-term exposures, shorting futures of mid-month tenors have been advocated in the past with a view of arresting further potential slumps, we wish to uphold the same positions. Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position.

Currency Strength Index: FxWirePro's hourly NZD spot index is inching towards -101 levels (which is bearish), while hourly USD spot index was at 154 (bullish) while articulating (at 07:40 GMT).

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