Cable bulls shrug-off bearish patterns in minor trend, major downtrend still below 50% Fibos – Trade one-touch calls and short hedge:
Cable ( GBPUSD -0.43% ) prices remained under pressure from last two trading sessions (refer 4H chart), the pair has formed shooting star and hanging man at 1.2986 and 1.2968 levels. But bulls seemed shrugging-off these bearish patterns, the current price attempts to test support at 7DMAs and remained well above 21DMAs.
For now, more rallies on cards in the minor trend upon intensified bullish momentum (both RSI & stochastic curves show upward convergence) and bullish DMA & MACD crossovers.
A number of indicators are suggesting prices are getting stretched above these levels.
On a broader perspective, it has plummeted more than 1.3146 (i.e. 50% Fibonacci retracements levels).
Well, these slumps below EMAs are observed especially after the formation of shooting star at 1.3755 levels, hammer attempts to counter, but both leading & lagging indicators in tandem with selling sentiments on this timeframe, more dips likely on bearish EMA crossover.
On daily trading grounds, at spot reference: 1.2966 levels, we advocate trading one-touch call option strategy in order to participate in potential upmoves, using upper strikes at 1.3011 levels. The strategy is likely to fetch leveraged yields as long as the underlying price keeps spiking towards upper strikes on the expiration.
Alternatively, one can initiate shorts in futures contracts of mid-month tenors with a view to arresting further downside risks. Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position.
Currency Strength Index: FxWirePro's hourly GBP is inching at 75 (which is bullish ), USD spot index is flashing at 54 levels (which is bullish ), while articulating (at 10:08 GMT 0.33% ).
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