FxWirePro: EUR/USD bears resume at 7-weeks highs with potential shooting star or gravestone – Tunnel spreads to speculate

Well, EURUSD has shown a slide in this week but still attempting to maintain 7-weeks highs.

Although EURUSD spiked from trendline support at 1.0449 levels, it has been struggling to bounce further above 21SMA levels on weekly (see both daily and weekly charts), as a result, we see a potential either shooting star or gravestone doji occurrence in this week’s candle with Europe trading session to spare.

Please be noted that the price has collapsed exactly at 21SMA levels where we see the strong resistance on daily plotting as well.

Current prices have gone below 7DMA, failure swings at stiff resistance likely to drag dips up to next strong support at 1.0513.

Please be noted the price behavior in short and medium term trend, price decline has been sliding through sloping trendline on weekly plotting.

We’ve seen bull swings after dragonfly doji (which is a bullish pattern), can a potential shooting star or gravestone (bearish patterns) evidence price dips? Any slumps below 7SMA could drag up to channel support, any bounce back can drag up to 1.0853.

RSI indicates convincing strength in declining trend downward with its convergence to the prevailing prices declines.

While stochastic curves remain below overbought zone (on dailies), still signals indecisiveness but slightly bearish bias.

MACD’s indicates indecisiveness but remains in the bearish territory.

It is wise to snap rallies to deploy fresh shorts as you see no traces of indications of the robust uptrend for now, instead trace out selling momentum on shorter term charts.

Trade tips:

Well, contemplating above technical reasoning, on speculative grounds we advise tunnel spreads which are binary versions of the debit put spreads.

This strategy is likely to fetch leveraged yields than spot FX and certain yields keeping upper strikes at 1.0722 (10 pips higher than 7DMAs) and lower strikes at 1.0657 levels.