FxWirePro: EUR/AUD inverted hammer to break-out trendline support but buy binary puts for targets of 15-20 pips

Technical Watch:

As per our prediction the pair breached trendline support at 1.4677 with an "inverted hammer" formation yesterday. After a downtrend, the formation of an inverted hammer is bullish because prices hesitated their move downward by increasing significantly during the day even after the trend line breach. Nevertheless, sellers came back into this currency and pushed prices back near the open at 1.4664 levels, but the fact that prices were able to increase significantly shows that bulls are testing the power of the bears. What happens on today after the inverted hammer pattern is what gives us an idea as to whether or not prices will go higher or lower.

Ever since the downswings are seen on this pair the leading oscillators have been showing downward convergence with dipping prices but for now divergence is evidenced on the same which means earlier signals for short term bulls. RSI trending near 52.9441 diverging with the previous downward falling prices, while %D line is attempting for crossover on slow stochastic at around 40 levels signifies buying momentum is back again. More importantly the pair is now attempting test previously breached trend line support at 1.4700 levels as considering a resistance.

Even though intraday session is expected to be in a tight range between bulls and bears, but on short to medium term basis the currency cross has shifted its stance to quite bullish bias. But on speculation front we see shorting opportunities; hence we prefer ATM binary delta puts for a maximum targets of 15-20 pips to reach next support at 1.4677 levels.