FxWirePro: NZD/USD forms bullish engulfing but technical indicators yet to confirm, unwise to buck major trend – Trade One-touch call and short hedge

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-DMAsbut engulfing pattern pop-up today to counter previous bearish swings, while momentum and trend indicators are indecisive. 

Both RSI and Stochastic curves show downward convergence that indicates the intensified momentum in the minor trend.

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. For now, extensions of rallies seem to be most likely on the daily terms but unwise to buck the major downtrend upon on intensified selling interests signaled by both leading oscillators.

Trading Tips: At spot reference: 0.6837 levels, on trading grounds, one can execute a one-touch call options strategy. Such exotic option with upper strikes at $0.6871 levels likely to favor the prevailing buying sentiments.

Alternatively, contemplating above technical rationale we advise never buck the major downtrend, NZDUSD short setup by snapping deceptive rallies on back-to-back shooting stars and triple top formation, on hedging grounds, we advocate shorting NZDUSD futures contracts of mid-month tenors as the underlying spot FX likely to target southwards in the medium run. 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 43 levels (which is bullish), while hourly USD spot index was at -16 (mildly bearish) while articulating (at 07:26 GMT).

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