USD/KRW taking support at channel line; Synthetic Split Futures to hedge

The pair both on daily as well as weekly chart is testing a crucial resistance of middle channel lines. Double top formation on this pair can also be traced out on weekly graph and the pair oscillates nearby 1^st peak at 1120.64 levels.

If this resistance (1120.64) doesn't sustain then we believe all chances of price drop until neckline of double top at 1074.22 levels.

So far RSI (14) doesn't react much to the downward pressure as it convergences to the price momentum. RSI currently trending at around 58.3687 level.

Slow stochastic with %D line at 56.9464 & %K line at 67.4003 levels indicates positive momentum to the prevailing uptrend.

Hence, any breach below 1110.60 on a closing basis has been a critical point of trade which would likely to drag until neckline.

Currency Derivatives Basket: Synthetic Split Futures

Those anticipate slumps in dollar against KRW can protect their portfolio with the below recommendation.

Buying an Out-Of-The-Money Put and simultaneously selling Out-Of-The-Money Call option builds this position.

The split strike prices that offer some upside protection. If the hedger's overview is wrong and the underlying futures price rises slightly he will not suffer any loss as he is a holder of OTM call.

On the flip side, a stronger downward move is necessary to produce a profit.

So this position would be the replica of short futures position.

Maximum returns as long as the underlying futures price slips towards downwards.