FxWirePro: EUR/GBP shooting star signals more clarity than gap up opening – Digital puts to magnify returns and near month forwards to hedge

Bears are intensified despite gap up candle more dips for the day likely as traces of bullish indications.

As a result, current prices on this timeframe has again slid below 21DMA although bulls have attempted to bounce above DMAs.

On a broader perspective, from the last 3 months the previosu bullish momentum has been absolutely shrunk away ever since the shooting star pattern at stiff resistance of 0.8795 has occurred.

Consequently, upon this bearish pattern the bears have managed to break below 7-EMA level, which is a caution for aggressive bulls.

More dips seem to be likely as the current prices slid below DMAs, EMAs and on bearish momentum indication by monthly chart.

Most importantly for the short terms traders, the bearish indication is backed by the momentum.

RSI on both timeframes evidence downward convergence with the price slumps that signals strength in declining trend.

While stochastic curves from overbought territory evidence convincing %D crossover on monthly terms, which is again an indication for a bearish sentiments are intensified.

Trading tips:

On hedging grounds, initiate shorts in forward contracts of near or mid-month tenors to arrest the potential slumps upto 0.8313 or even upto 0.8202 levels.