FxWirePro: EUR/CHF bears form falling wedge, consolidation phase drifts in sideways – Trade boundary strikes and short hedge

Technical Glance: EURCHF bears create falling wedge patterns on both daily plottings, where shooting star and hanging man pop-up at wedge resistance (refer circular areas in daily chart). For now, mild rallies take supports at the wedge baseline, while leading oscillators (RSI & stochastic curves) signal indecisiveness and the trend indicators are also signaling the same.

Thus, for now, although buying sentiments are prevalent and more rallies in the interim trend seems to be dubious (refer daily chart). 

Whereas bearish engulfing candle has occurred at 1.1522 levels which have nudged price below EMAs on monthly terms. While both monthly leading oscillators (RSI and stochastic curves) show downward convergence to the prevailing price slumps that indicate the strength and bearish momentum in the selling sentiments. MACD on this timeframe, show bearish crossover that signals weakness in the major downtrend. 

The major trend that was in consolidation phase has now shown the failure swings at the stiff resistance of 1.1444 and drifts in sideway trend (see very narrow price actions on the monthly chart).

Well, overall, on a broader perspective, the pair that was in the consolidation phase after a massive downtrend, bears have again managed to breach below major support zones – at 1.1375 (i.e. 21-EMAs) and 1.1297 (i.e. 7-SMAs), and now heading for retracing up to 50% Fibonacci levels (refer monthly plotting).

Trade Tips: Well, on trading perspective, at spot reference: 1.1353 levels, it is advisable to trade boundary options strikes, using upper strikes at 1.1365 and lower strikes at 1.1344 levels. The strategy is likely to fetch leveraged yields as long as the underlying price remains between above strikes on the expiration.

Alternatively, on hedging grounds ahead of this week’s SNB monetary policy meeting, we advocate initiating shorts in EURCHF futures contracts of April’19 delivery. 

Currency Strength Index: FxWirePro's hourly EUR spot index is inching towards 91 levels (which is bullish), while hourly CHF spot index was at 87 (bullish) while articulating (at 12:13 GMT).

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