FxWirePro: NZD/USD buzzing bears on triple top pattern, minor trend shrugs-off hammer – Trade boundary strikes and short hedge ahead of RBNZ

On the major trend, NZDUSD forms triple top pattern with top1 at 0.7485, top2 at 07558, top3 at 07437 and neckline at 06787 levels.

Consequently, bears are extending price slumps. Please observe steep slumps below EMAs (refer monthly chart). Hammer pattern occurred at 06817 level that attempts to counter at neckline, while both leading and lagging indicators have been bearish bias.

For now, bearish EMA and MACD crossovers indicate the downswings are most likely to extend further. To substantiate this bearish stance, both leading oscillators show constant downward convergence to the prevailing price slumps that signal intensified bearish momentum ahead of this week’s RBNZ monetary policy (scheduled on Wednesday).

On minor trend, the failure swings are observed at stiff resistance of 06852 levels with bearish pattern candles, such as, bearish engulfing and doji patterns at this juncture (refer daily plotting).

As a result, price slid below DMAs with bearish DMA crossovers and intensified momentum on this timeframe as well.

Failure swings at stiff resistance with doji & bearish engulfing patterns, consequently, price slid below DMAs, more slumps likely on bearish DMA crossover.

Trade tips: On daily trading grounds, it is wise to buy boundary binary options, with upper strikes at 0.6755 and lower strikes at 0.67 levels.

The trading between these strikes likely to derive certain yields in this perplexed trend in the short term, more importantly, these yields are exponential from spot movements.

For cash or nothing, these options would be exercised if the forward prices to remain between both strikes (i.e. 0.6755 > Fwd price > 0.67).

Alternatively, on hedging grounds, we advocate shorting futures contracts of mid-month tenors as the underlying spot FX likely to target southwards 0.65 levels in the medium run.

Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position.

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 5 (which is absolutely neutral), while Hourly NZD Spot Index was at -107 (bearish) at 05:57 GMT. 

For more details on FxWirePro's Currency Strength Index, visit below web-link:

http://www.fxwirepro.com/currencyindex