GBPAUD bearish trade setup as rallies fails @ channel resistance

GBPAUD  prices have been sliding below 7DMAs constantly in the minor trend, whereas the major trend has been spiking through the rising channel .

You can spot buzzing bears upon the double top pattern which is bearish in nature, any break-down below double top neckline coupled with bearish DMA & MACD crossovers to signal more weakness.

Top 1 at 1.8862, top2 at 1.8882 and neckline is at 1.8094 levels (refer daily chart ). 

While the intermediate trend spikes through the rising channel , bears resume at the channel resistance as you can see, Consequently, the current price slides below EMAs with bearish crossover. We could foresee more slumps on the cards as both leading & lagging indicators signal weakness & bearish momentum.

Both leading oscillators ( RSI and Stochastic curves) show downward convergence to prevailing price dips that signal the intensified selling momentum.

To substantiate the bearish stance, MACD also shows bearish crossover to indicate downtrend to prolong further. 

Trade tips: At spot reference: 1.8158 levels, contemplating above technical rationale, one can execute one-touch put options strategy. Such exotic option with lower strikes at 1.8094 levels likely to fetch exponential yields than spot moves. 

Alternatively, on hedging grounds, we advocate short hedging strategy as we see significantly less upside for GBPAUD in the near term, while the major downtrend remains intact.

Hence, it is wise to initiate shorts in GBPAUD futures contracts of June’19 delivery as further downside risks are foreseen.

Currency Strength Index: FxWirePro’s hourly GBP spot index is inching towards -29 levels (which is mildly bearish ), while hourly AUD spot index was at 46 ( bullish ) while articulating (at 12:11 GMT ).

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