FxWirePro: GBP/JPY dragonfly puzzles major trend by missing probable morning star pattern – Stay short via tunnel spreads as bears resume at 21-SMA

Friday’s spike in the pair hasn’t been moving anywhere beyond 136.230 levels northwards nor even below 135.854 levels on southwards.

Failure swings at the resistance of 136.230 (21SMA), have now broken supports at 135.854 levels.

The above price behaviour is not isolated with price and volumes, both leading and lagging oscillators indicate selling pressures.

Selling momentum is intensified as we can make out from the leading oscillators converging downwards along with the dipping prices.

While RSI (14) trending below 41 levels that signals the strength in selling interests.

Stochastic oscillators have reached oversold territory but no convincing %k crossover is seen, instead intensified selling momentum is observed.

On a broader perspective, it's been urged for more price declines ever since dragonfly doji is attempting to bottom out, but bears resume missing out probable morning star pattern on the monthly chart.

Current prices have pushed below SMAs curves on 1H chart. Bears have managed to slide below 7EMA after gravestone pattern on the weekly chart as well, for now, the drag towards 129.750 seem more likely.

Trade tips:

Well, since implied volatility is very high in GBP crosses on the eve of BoE's monetary policy on Thursday which seems unlikely to provide more easing in its bank rate decision, on an intraday speculative basis, it is good to buy tunnel spreads which are binary versions of the debit put spreads.

This strategy seems best suitable on speculative grounds for certain yields but with leveraging effects. This is just for an intraday trading perspective, but in the long run, this is certainly not yet an ideal time for fresh longs.