FxWirePro: EUR/AUD whipsaws pattern goes in 5th week in a row, both major/minor uptrends seem to be edgy – Tunnel spreads to trade and long hedge

Chart and candlestick formed: EURAUD forms whipsaws pattern on weekly and shooting stars on the 4H chart to signal weakness.

Consequently, the current prices slide below SMAs.

Thereby, the selling sentiments are intensified as the bearish indication is backed by both momentum indicators.

Well, on a broader perspective, the rejection at the stiff resistance of 1.5678 levels forms shooting star and hanging man pattern candles at 1.5622 and 1.5671 levels respectively. Ever since then, these bearish pattern candles have evidenced considerable slumps below 7EMAs to hamper the consolidation phase in the major trend (refer weekly plotting).

Historically, you could make out the prices have tumbled as it failed to sustain above this resistance level and how the price behavior has been upon the occurrence of the shooting star and hammer patterns.

Most noticeably, the selling sentiments are backed by both momentum & trend indicators on this timeframe as well.

RSI and stochastic curves have constantly been converging downwards to the ongoing price dips to indicate the strength and the intensified momentum.

While MACD also substantiates the same, lagging oscillator evidences bearish crossover to indicate the price slumps to prolong further.

The intermediate trend is all set to slide southwards to hamper the buying sentiments in the consolidation phase.

Nonetheless, extended upswings could only be expected upon a decisive break-out above stiff resistance of 1.5678 levels.

Having said that, we conclude by stating, overall, both major and minor trends seem to be edgy for now, while the short-term trend may extend bearish streaks on intensified bearish momentum.

Trading tips:

Contemplating prevailing bearish sentiments, on trading grounds, it is advisable to snap deceptive rallies and deploy tunnel spreads with upper strikes at 1.5379 and lower strikes at 1.5324 with a view to participating in bearish rallies.

Alternatively, at spot reference: 1.5357, contemplating intermediate uptrend, on hedging grounds we recommend adding longs in futures contracts of far-month month tenors.

Holders in a futures contract are expected to maintain margins in order to open and maintain a longs futures position.

Currency Strength Index: FxWirePro's hourly EUR spot index is flashing at 45 (which is bullish), while hourly AUD spot index was at -8 (neutral) while articulating (at 06:43 GMT). For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex.

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