FxWirePro: EUR/JPY bulls banks on hammer patterns at 38.2% Fibos to bounce back – Trade one touch calls and short hedge as prices still edgy below 21-EMAs

Chart and candlestick pattern formed – Resembling bullish engulfing pattern candle with the big real body has occurred at 128.985 levels (refer 4H chart). Consequently, you can make out sharp rallies upon break-out above stiff resistance of 128.494 levels.

Failure swings were observed at this juncture in the recent past, while the momentum and trend indicators signal more weakness (intraday charts).

While on intermediate trend, hammer patterns have occurred at 127.626 and 128.173 levels that spikes off the rallies and on the contrary shooting star pattern pops up at 128.415 levels to counter the bullish momentum and restrain rallies below 21DMAs (refer weekly chart). Bulls, on this timeframe, resume after retracing 38.2% Fibonacci levels.

While both leading and lagging indicators signal strength and momentum in momentary upswings and weakness remain intact in intermediate trend (refer both 4H and weekly plotting).

Trade tips: On trading perspective, at spot reference: 128.925 levels, it is advisable to buy the one-touch call option, use strikes at 129.148 levels, the strategy is likely to fetch leveraged yields as long as underlying spot FX keeps spiking 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 131 levels (which is bullish), while hourly JPY spot index was at -110 (bearish) while articulating at 05:15 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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