FxWirePro: NZD/JPY Interim Rallies Seem Deceptive, Major Downtrend Still Intact In Falling Wedge – Trading & Hedging Setup
FxWirePro: USD/CAD directional hedges as bears break-down channel support in minor trend, major trend consolidates through uptrend line
Technical Chart and Candlestick Patterns: USDCAD minor trend has developed an ascending channel pattern so far. The pair has tested channel support several times in the recent past, consequently, spiked well above EMAs.
But for now, bears breach below channel support with bearish DMA & MACD crossovers as you can observe daily plotting, while both leading and lagging indicators signal downtrend extension.
Both RSI and Stochastic curves show downward convergence to these price dips to indicate the strength and the intensified selling momentum in the minor bearish trend.
To substantiate this selling sentiment, bearish DMA & MACD crossovers also indicate the downswings to prolong further.
On the flip side, the major uptrend goes through uptrend line (refer monthly chart), the current price hovers around 21-EMAs as both momentum & trend indicators edgy but still in bulls' favor.
Hence, the prevailing uptrend is most likely to prolong further if it holds the support of the uptrend line and 21-EMAs.
Trade tips: On hedging grounds, at spot reference: 1.3172 levels, contemplating above technical factors, we advocate initiating shorts in USDCAD futures contracts of July’19 delivery as further downside risks are foreseen and simultaneously, longs in futures of August’19 delivery for the major uptrend. Thereby, one can directionally position in their FX exposures. The directional implementation of the same trading theme by further allow for a correlation-induced discount in the options trading also if you choose strikes appropriately.
Currency Strength Index: FxWirePro's hourly CAD spot index is flashing at 14 (which is mildly bullish), while hourly USD spot index was at -64 (bearish) while articulating at 06:09 GMT.
For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex