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EUR/USD short set-up on striking bearish technical indications | January 4, 2019

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Technically, EURUSD after rejecting the 1.1500 range resistance region, the prices tested down to 1.1300 rising range support.

We reiterate that  EURUSD  interim upswings are not backed by technical indicators; the current prices are hovering at DMAs.

Previously, weakness of this pair is observed at the same juncture on the occurrence of bearish engulfing and gravestone doji patterns at stiff resistance zone (i.e. 1.1466 - 1.1501 levels).

For now, we remain in the range, with 1.1390-1.1425 interim resistance. While under 1.1500, our bias remains for an eventual test and break of the 1.1215 lows.

On the medium-term perspective, our stance on the levels around 1.12-1.08 is perceived as a major support region and the ideal area for a long-term higher low over the 1.0340 lows set in 2016. Notable supports within this region lie at 1.1190 and 1.1000. Further evidence is needed to prove that 1.1215 was the higher low we are looking for.

While the major downtrend has been sliding through sloping channel, where bears retrace 61.8% Fibonacci levels from 2018 highs on the failure swings at channel resistance as both leading oscillators signal bearish momentum (refer monthly chart).

Trade tips:At spot reference: 1.1403 levels, contemplating above technical rationale, one can execute tunnel spread options strategy. Such exotic option with upper strikes at 1.1430 and lower strikes at 1.1377 levels have been unbiased strategy but to favor slightly the bearish sentiments.

Alternatively, shorting futures of mid-month tenors are advocated with a view of arresting further potential slumps. 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 EUR spot index is inching towards 27 levels (which is mildly bullish ), while hourly USD spot index was at 78 ( bullish ) while articulating (at 07:57 GMT ).

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