FxWirePro: AUD/NZD trading setup contemplating major trend wedged in tight range despite dragonfly doji, bulls breaks out channel resistance

Chart and candlestick patterns formed: The AUDNZD, in the minor trend, has broken out channel resistance with a stern bullish engulfing candle at 1.0422 levels (refer daily chart). Consequently, bulls are attempting to make upside traction in both the minor trend and major consolidation phase. 

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. For now, more dips seem to be on cards as both technical indicators are indecisive but bearish bias (refer monthly plotting).

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. 

Bears plummet prices below EMAs on shooting star at 1.0856 levels, both leading oscillators indicate selling momentum (RSI & Stochastic curves (refer monthly plotting). 

Although we spot out dragonfly doji pattern candles but no confirmation from technical indicators. Overall, some sort of consolidation just above 1.0450 is foreseen.

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 1.0548 levels. Thus, at spot reference: 1.0445 levels, one-touch call option strategy is advocated on an intraday trading basis, using upper strikes at 1.0548 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 this 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 76 levels (which is bullish), while hourly NZD spot index was at 27 (mildly bullish) while articulating (at 14:27 GMT). 

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