This APAC pair has extended losses on 4th consecutive day after dropping from the resistance at 0.7215 levels (1-year highs at 0.7324, see monthly charts).
From here onwards, more bearish pressures is seen as it has also dropped below DMAs on daily charts.
Leading oscillators signal bearish swings on the daily charts, RSI shows downward convergence below 49 levels and on monthly, it is adverse, while same is the case with slow stochastic curves, bearish crossover touching oversold trajectory.
MACD on daily signals prevailing downswings may drag further, next strong supports are seen at around 0.7049 levels.
Even though from last Wednesday the prices have been consistently plummeting with intensified selling momentum, but the intermediary trend should not be disregarded.
The major trend now has shown substantial strength moving from sideways to decent recoveries if you have to observe monthly graphs which would mean bulls now holding stronger (see monthly charts).
On the contrary to the prevailing downswings, any bounce back to breach above 0.7215 would determine uptrend again.
So, we interpret this as a bullish alarm for long term investors but short-term speculators can use our below trading strategy in this puzzling trend offered by bearish sentiments.
Trade tips:
Hence, considering above technical reasoning, one can eye on option tunnel which is a debit spread of binary version.
In-The-Money tunnel would be formed of shorts of in-the-money binary put with shorter expiries below the current exchange rate less an Out-Of-The-Money longs binary delta put below the exchange rate.
We wouldn't be surprised if the spot FX drifts up to 30-40 pips below current levels of 0.7102 levels in no time or 20-25 pips on northwards in intraday terms.
