FxWirePro: EUR/GBP shooting star boosted by oscillators keeps bulls taking halt – more dips likely in short term

Speculators can eye on short term downswings:

We spotted out a shooting star (on daily charts) at peaks of 0.7673 which is bearish in nature.

We've been seeing slumps as a result from the highs of 0.7755, while leading oscillators to converge these slumps.

RSI began showing convergence with these prevailing slumps at 32.8126, and bearish crossover on slow stochastic curve signifies more selling pressures.

At present it has broken supports at 0.7642 levels and attempting break 0.7585, for now, all signs of slipping below and testing supports at 0.7464 levels.

However, we cannot afford to gauge this as trend reversal but a mere consolidation.

But if you observe when weekly and monthly charts are plotted as to how the above bearish technical indications are lagging, they are baffling to the above signals.

However, there exists a clear downward convergence on RSI on daily with a supportive signal from stochastic curve as well, %D line crossover again sends some alarms to bulls which can be deemed as short term selling pressure.

Upon a breach of immediate supports around 0.7585 on a closing basis, one can expect more dips.

Trade Tips: Contemplating above technical reasoning, trend may head either way with little southward bias which is why we would like to advocate preferring below strategy.

With risk reversal being neutral (at zero), go long on 1w at the money -0.49 delta put, 2w out of the money (1% strike i.e. our below cap) -0.18 delta put and simultaneously go long on 1w at the money +0.51 delta call with net debit.