EURUSD interim and major trend bears develop descending channel patterns (observe daily and monthly plotting).
The minor trend tests channel supports and spikes above 7DMAs but restrained below at 1.0996 (i.e. 21-DMA levels), mild bullish swings are restrained at this juncture from last 2-3 days or so spinning top formation at 1.0964 level.
Since then we feel the failure swings below 21DMAs most likely to resume downtrend as the trend indicators still signal downtrend continuation (refer daily chart).
While the major downtrend has also been sliding through sloping channel, where bears retrace more than 61.8% Fibonacci levels from 2018 highs on the failure swings at channel resistance, now on the verge of 78.6% as both leading oscillators and lagging indicators signal bearish momentum and downtrend continuation respectively (refer monthly chart).
Shooting star pattern pops-up at peaks in the major trend, ever since then you could make out bears have shown their effects, steep slumps have gone below EMA levels and retraced more than 61.8% Fibonacci levels of January 2018 highs (i.e. 1.2612) and January 2017 lows (i.e. 1.0371 levels) (refer monthly chart).
Trade tips: At spot reference: 1.0982 levels, contemplating above technical rationale, one can execute tunnel options strategy. The exotic option with upper strikes at 1.0999 and lower strikes at 1.0950 levels likely to fetch exponential yields than the spot moves.
Alternatively, ahead of Fed’s Chairman Powell’s speech and Eurogroup’s meeting that are scheduled for this week, maintaining shorts in futures of mid-month tenors have been advocated with a view of arresting further potential slumps, it is still wise to uphold the same strategy. Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position.
