FxWirePro: AUD/NZD Technical, Trading and Hedging Pack

Chart and candlestick patterns formed: AUDNZD's minor trend takes support at the double top neckline (top 1 at 1.0729, top 2 at 1.0723 and neckline at 1.0523 levels, refer daily chart).

Prior to which, shooting star at 1.0625 level nudges prices below DMAs, but bulls bounce back on the neckline support with the gap-up pattern at 1.0571 level.

While both leading and lagging indicators substantiate uptrend on this timeframe. RSI and stochastic curves show upward convergence to the prevailing bullish rallies that indicates the strength and intensified buying momentum.

Consequently, bulls are attempting to make upside traction with bullish DMA & MACD crossovers in both the minor trend and major consolidation phase. 

On a broader perspective, dragonfly doji pattern candles have occurred at 1.0506 and 1.0422 levels on monthly terms, as a result, bulls take-off rallies above EMAs, on the contrary, failure swings were observed at the stiff resistance of 7-EMA levels as shooting star pops-up at 1.0631 levels.

The major consolidation phase that has lasted for more than 4 and a half years is now stuck in the range, both leading oscillators indicate mild strength but not convincing though. 

Although we spot out dragonfly doji pattern candles but no clarity from the technical indicators on this timeframe. Overall, some sort of consolidation just above 1.0625 is foreseen but the major range-bounded trend cannot be totally ruled out.

Trade tips: One-touch call options: Contemplating bullish sentiments in the near-term, if the prevailing bullish sentiments sustain, then, bulls are most likely to extend further up to 1.0725 levels. Thus, at spot reference: 1.0625 levels, one-touch call option strategy is advocated on an intraday trading basis, using upper strikes at 1.0725 level which is 100 pips from the current levels.

The trading strategy likely to fetch leveraged yields that would be exponential than spot trades when the forward FX prices keep spiking higher up to upper strikes on the expiration.

Short hedge: Alternatively, on hedging grounds ahead of RBA’s monetary policy that is scheduled for the next week, long-term investors are advised to stay short in futures contracts of mid-month tenors. The writers of the 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 -32 levels (which is mildly bearish), while hourly NZD spot index was at -68 (bearish) while articulating (at 05:22 GMT). 

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