FxWirePro: EUR/JPY bulls attempt to drag rallies on hammer formation – Trade boundary strikes and short hedge as major trend edgy

EURJPY has shown considerable price rallies upon below mentioned patterns, the trend seems to be little weaker for today.

Technical chart and candlestick patterns formed – Hammer pattern candles pop-up at 127.574 and 128.141 levels that evidence upswings, whereas shooting stars and hanging man patterns counter. Consequently, prices are plummeted below 7DMAs, attempt of upswings restrained below stiff resistance of 129.260 levels.

While on intermediate trend also, bearish engulfing evidences price drops below EMAs (refer monthly chart). For now, the current major trend most likely to prolong bearish swings that are backed by both momentum oscillators as both leading indicators (RSI & stochastic curves) show downward convergence that signal bearish strength & momentum and weakness remains intact on the monthly terms.

Trade tips: On trading perspective, at spot reference: 128.250 levels, it is advisable to boundary option spreads, using upper strikes at 128.5870 and lower strikes at 127.808 levels, the strategy is likely to fetch leveraged yields as long as the underlying spot FX remains between these strikes on the expiration.

Alternatively, we advocate shorts in futures contracts of mid-month tenors with a view to arresting potential dips.

Currency Strength Index: FxWirePro's hourly EUR spot index is flashing at -152 levels (which is bearish), while hourly JPY spot index was at 53 (bullish) while articulating at 09:12 GMT.

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