EUR/USD shooting star hampers bullish momentum in intermediate trend, minor trend on verge of extending double top – Tunnel spreads to trade:
Shooting star pattern candle has occurred at 1.2027 levels on previous month’s candle. As a result, you could see price dips in this month (refer monthly plotting).
Hanging man pattern candles have occurred at 1.2044, 1.2074, and 1.2071 levels on EURUSD -0.26% intraday plotting (refer 2H chart).
After bearish pattern , prices slid below 7SMAs, gravestone doji occurs at 1.2051 level that evidences more slumps. Consequently, steep slumps below SMAs with bearish SMA crossover, for now, bearish rout to extend further upon intensified bearish momentum.
In this process, bears have managed to form double tops (which is bearish in nature) with top 1 at 1.2081 and top 2 at 1.2089 levels.
On a broader perspective, the bull swings have managed to break out the long lasting range resistance but shooting star pattern candle signals weakness for now. Subsequently, bears are plummeting the current prices in the consolidation phase of the major trend.
But on the contrary, bulls may test support at around 7EMAs to bounce back. Otherwise, price drops upto the next strong supports at 1.1602 seem most likely.
While both leading, as well as lagging indicators on intraday terms ( RSI , Stochastics, SMAs & MACD ), have been signaling extension of downswings (refer 2H charts).
At spot reference: 1.2018 levels, contemplating prevailing bearish sentiment for the day, on trading perspective, it is advisable to buy tunnel spreads using upper strikes at 1.2036 and lower strikes at 1.1990 levels. Thereby, the intraday speculators can eye on southward targets about 20-30 pips. The strategy is likely to fetch leveraged yields as long as underlying spot FX keeps dipping but well above lower strike before the binary expiry duration.
Currency Strength Index: FxWirePro's hourly EUR spot index is displaying shy above -63 levels (which is bearish ). While hourly USD spot index was inching towards -19 ( bearish ) while articulating (at 05:55 GMT ).
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