FxWirePro: Frequent Occurrence Of Shooting Stars Halts EUR/USD Minor Uptrend – Trading & Hedging Setup

EURUSD’s renewed bullish phase that extended from 1.0727 through 1.12 levels, now appears to be exhausted as the minor uptrend senses overbought pressures. 

Frequent occurrence of shooting stars at the peaks of rallies attempt to nudge prices below DMAs as both leading & lagging indicators are in line with the bearish price sentiments (refer 4H charts).

Prior to which, triple bottom assisted in breakout above 100-DMAs to bring-in bullishness (daily plotting), but that is little weaker now. Please beware of any breakdown below 21-SMAs that will resume bearish business again.

As stated before, the next major resistance zone is observed at the 1.1383 areas. If we head straight up to that region, we would expect it to at least cap the short-term move. Intra-day support lies in the 1.1275 region. A decline through there suggests a lower highs on prevailing overbought pressures.

On a broader perspective, bulls are on the verge of extending 3-months' highs, while the major downtrend still remains intact below 50% Fibonacci retracement levels (refer monthly chart), we still await confirmation of whether 1.0635 was a more significant low for a move up to and through 1.1495, or whether price action between these levels is merely a correction phase before an attempt to test parity. Both leading & lagging oscillators seem to be indecisive on this timeframe.

Trading tips: At spot reference: 1.1293 levels (while articulating), although we could see some ongoing rallies for today, contemplating short-term technical that indicates intraday selling sentiments, one can execute boundary options strategy. Such exotic option with upper strikes at 1.1320 and lower strikes at 1.1270 levels likely to fetch exponential yields than the spot moves. The strategy can get assured yields as long as the underlying FX remains between these two strikes.

Alternatively, we recommended shorts in EURUSD futures of July’20 delivery for the major downtrend ahead of Fed monetary policy meeting that is scheduled for this week, we now wish to uphold these positions on hedging sentiments.