FxWirePro: AUD/JPY minor trend in sloping channel, flurry of bearish patterns in major downtrend – Trade boundary strikes and short hedge

We kept reiterating from last couple of months that the AUDJPY bearish prospects in the major trend quite often even when bulls hastily displayed some upswings. 

Well, dear readers, before we proceed further with the deep dive, let’s just quickly glance through our previous post, follow below weblink for the clarity about the trend:

https://www.econotimes.com/FxWirePro-AUD-JPY-breaks-out-trend-line-resistance-both-momentum-and-trend-indicators-substantiate-major-trend-still-edgy-below-382-Fibos-1247317

Had you deployed short hedges seeing the major downtrend in the above write-up, you would have saved considerably in your AUDJPY FX exposures.

AUDJPY minor trend has been sliding through sloping channel, while momentary rallies possible upto next stiff resistance (resistance being 80.607 and 81.062 levels), the pair has formed frequent shooting stars, gravestone dojis, hanging mans followed by bearish engulfing patterns at channel resistance levels. 

Ever since then, you can observe steep slumps below DMAs after the formation of these bearish patterns. 

But for now, momentary bulls attempt to bounce back with the formation of hammer at 79.289 levels, more rallies seem to be likely as both RSI and stochastic indicates the buying momentum, while MACD has shown bullish crossover remaining in bearish trajectory (refer daily chart).

While same has been the case with the major trend, frequent shooting star patterns have occurred in the recent past that evidence failure swings at 21-EMAs, consequently, Engulfing pattern drags price slumps below 7EMAs, Both RSI & stochastics signal bearish momentum (refer monthly chart).

Trade tips: On trading grounds, at spot reference: 80.256 levels, it is wise trade boundary strikes, with upper strikes at 80.607 and lower strikes at 79.800 levels.

Alternatively, on hedging grounds, we continue to advocate shorting futures contracts of mid-month tenors as the underlying spot FX likely to target southwards 78.500 levels in the near 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 AUD spot index is inching towards 132 levels (which is bullish), while hourly JPY spot index was at -51 (bearish) while articulating (at 07:37 GMT). For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex