FxWirePro: GBP/CAD bearish engulfing, doji and hanging man convert whipsaws into downswings, major downtrend also resumes with hanging man

Bearish engulfing, Long-legged doji & hanging man patterns have occurred at 1.7085, 1.7180 and 1.7135 levels respectively.

As a result, these bearish patterns have evidenced considerable price dips, subsequently, previous upswings are losing strength after sliding below DMAs.

7DMA is all set to cross below 21DMA which is a bearish crossover, for now, more slumps seem to be on cards upon bearish DMA crossover.

The bearish pressure is again observed, it is witnessed continues streaks of bearish swings 3 days in a row that has gone below 21DMA levels.

On a broader perspective, 3-months uptrend sentiments were successfully hampered by hanging man formation at 1.7441 levels (on monthly chart). Consequently, bears resumed in the major trend and the current price on this timeframe slid below 1.7248 (i.e. 21EMA).

As the robustness in both short and long-term bearish sentiment gets confirmation from previous month’s candle (hanging man), you could see failure swings at the stiff resistance of 1.7505 levels followed by considerable price dips.

Most importantly, both daily and monthly RSI oscillator signals losing strength in the previous rallies, we see consistent convergence to the prices declines on daily plotting.

While slow stochastic has also been indicating the same, the continuous downward convergence indicates intensified bearish momentum.

To substantiate, MACD signals the downtrend likely to prolong further.

Well, having said that we wrap up with a concluding note, short-term aggressive bears can speculate this pair via tunnel spreads, alternatively, long-term investors at current juncture contemplating above bearish indications, we advocate shorting futures contract of mid-month or near month expiries for target towards 1.6364 and 1.5749 or below levels cannot be ruled out upon breach of 1sttwo targets.

Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position.

While tunnel spread is likely to fetch leveraged yields than spot FX and certain yields keeping upper strikes at 1.7083 and lower strikes at 1.6969 levels.

Currency Strength Index: FxWirePro's hourly GBP spot index is at shy above 26 levels (which is bullish), while hourly CAD spot index is edging higher at 123 levels (bullish) while articulating (at 10:29 GMT). For more details on the index, please refer below weblink:

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

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