GBP/JPY bears breach below wedge support, hammer counters : FxWirePro | March 14, 2018

GBPJPY -0.03% interim rallies attempt to spike above 7-DMAs, but that is where the stiff resistance is observed at 149.399 &150.420 levels.

The frequent occurrence of shooting stars plummets prices well below 7DMAs, on the contrary, hammer pattern candle counters to spike above DMAs again. For now, more rallies seem to be likely only on break-out above this stiff resistance areas (refer daily chart ).

The pair has been tumbling into deep tunnels ever since the formation of shooting star at peaks of rallies at 153.841 levels which is exactly at rising wedge resistance line (refer weekly chart).

While same has been the case in the minor trend of this pair, shooting star has occurred at every now & then. Shooting stars have occurred at 155.507, 151.272 and 149.970 levels and observe the price behavior subsequently (refer daily plotting).

While the consolidation phase is also restrained below EMAs, the intermediate trend of this pair has breached rising wedge support and bears in the major trend have resumed showing their functions.

Just observe as and when shooting star patterns pop up at wedge resistance to signal weakness, accordingly, the considerable slumps are seen (refer weekly plotting).

More rallies are possible only above 21EMAs (i.e. above mentioned resistance areas) as both leading and lagging oscillators on weekly timeframes are still in bears' favor.

Trade tips: On trading grounds, contemplating above technical reasoning, the one touch binary call option trades are recommended to participate in ongoing bullish minor trend (strikes 149.398), at spot reference: 148.877 levels, in this trade setup, options trader reckons that the price of the underlying spot FX keeps flying before expiration.

Alternatively, on hedging grounds, we advocate shorting futures contracts of near-month tenors as the underlying spot FX likely to target southwards 146.50 levels in the medium run.

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 spot index has turned into 41 (which is bullish ), while hourly JPY spot index was at shy above 9 (neutral) while articulating (at 06:24 GMT             ).