FxWirePro: Stay short in EUR/AUD on double top formation and bearish EMA crossover – Snap momentary rallies for leverage binary spreads

On daily charts, the prices have been sliding in falling wedge, currently sensing resistance at wedge topline, the break above may drag rallies again up to 1.4509 levels.

The bears in major trend went on to form the double top pattern at the resistance of 1.4509 levels with top 1 at 1.4489 and top 2 at 1.4502 levels to signal further bearish pressures.

Currently, the upswings for the day attempt to break out a wedge resistance, we reiterate any break-out this resistance and the sustenance above would likely to drag the rallies up to next resistance of 1.4509 levels.

On the flip side, the failure swings can pull back slumps up next strong support at 1.4090 levels.

In the short run, both leading and lagging indicators indicate bullish momentum by converging upwards to the price rallies on daily charts.

Currently, RSI (14) on daily is indicative of strength in upswings as you could easily see the convergence to the prevailing rallies but could be deceptive at 54 level where it failed to fade the strength at this stage.

Most importantly, the robust volume build ups are in conformity to these downswings across the falling wedge.

If you aren’t convinced with this analysis, then let’s glance through monthly plotting that runs you through the major downtrend.

We think, in a long term bears' intensity is strengthening as there is no sign of strong buying sentiments so far.

The current price on this timeframe slide below EMAs but tested support at 1.4018, any breach below would drag the slumps on bearish EMA crossover.

To substantiate this bearish stance, both leading oscillators (RSI and stochastic) converges to the declining prices.

MACD also signifies the ongoing downtrend to prolong further.

Hence, the trading recommendation for the day would be buying one touch binary calls favoring current upswings as the pair attempts to break-out wedge resistance as stated above, it is good to go with these options at every decline and bring in leveraging effect with OTM strikes for a minimum target of 30-35 pips with ease.

The payoff of touch option has been conditional if EURAUD, in this case, would touch the OTM strike price within any time period by the time of expiration, if the investor predicts correctly and the asset touches the strike price the option expires "in the money".

Alternatively, on medium term perspectives, we encourage shorts in mid-month futures for targets around 1.4018 and even up to 1.3960 levels, but maintain a strict stop loss of 1.4509 levels.