FxWirePro: EUR/JPY bears win trades in tussle between hammer and shooting star – Trade one touch puts and short hedge on bearish engulfing

Chart and candlestick pattern formed – Shooting star, gravestone doji, and bearish engulfing pattern candles occurred at 129.438, 129.645 and 127.981 levels respectively (refer daily chart).

Failure swings are observed at the stiff resistance of 128.3788 levels, while the momentum and trend indicators signal more weakness (daily charts).

Hammer occurs at 127.626 that spikes off the rallies and on the contrary shooting star pattern pops up at 128.415 levels to counter the bullish momentum, both leading and lagging indicators signal weakness (refer weekly plotting).

Both leading indicators (RSI and stochastic curves) on daily timeframe show downward convergence that signals bearish strength and momentum.

Trade tips: On trading perspective, at spot reference: 129.273 levels, it is advisable to buy one touch put option, use strikes at 127.156 levels, the strategy is likely to fetch leveraged yields as long as underlying spot FX keeps dipping further until expiry duration.

Alternatively, deploy shorts in futures contracts of mid-month tenors with a view to arresting potential dips.

Currency Strength Index: FxWirePro's hourly EUR spot index is flashing at -81 levels (which is bearish), while hourly JPY spot index was at 170 (highly bullish) while articulating at 06:18 GMT. For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex

The above indices are also conducive to the intraday trading strategy as advocated above.

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