EURUSD Chartpack - Technicals & Trade Setup | November 13, 2018

EURUSD 0.23%  interim upswings are not backed by technical indicators, current prices plummet well below DMAs on gravestone doji pattern at stiff resistance (i.e. 1.1509 levels). For now, further slumps seem to be most likely on overbought pressures (refer daily chart ).

The pair also forms head and shoulder pattern with head at 1.2555, left shoulder at 1.2092 and right shoulder at 1.1815 levels, consequently, prices are all set to head towards 61.8% Fibonacci retracements (refer weekly chart).

Stiff resistance is seen at 1.1509 levels, that is where strong support was observed in the recent past and for now, gravestone doji has occurred at the same juncture (refer circular area).

As per the long-term analysis, the major trend has retraced more than 50% Fibonacci levels, the shooting star , hanging man pattern pops-up at peaks, ever since then you could make out bears have shown their effects, steep slumps have gone below EMA levels and retraced more than 50% Fibonacci levels of January 2018 highs (i.e. 1.2612) and January 2017 lows (i.e. 1.0371 levels) (refer weekly chart).

Overall, the current price still remains well below 21-EMAs despite today’s rallies in a medium-run, bears are likely to extend 1 and half year lows, and most likely to retrace 61.8% Fibonacci levels.

We could foresee more slumps on cards as both leading oscillators ( RSI and stochastic curves) and both trend indicators (DMAs, EMAs & MACD ) have been signaling intensified bearish momentum and downtrend continuation respectively.

At spot reference: 1.1245 levels, contemplating above technical rationale, one can execute tunnel spread options strategy. Such exotic option with upper strikes at 1.1299 and lower strikes at 1.1214 levels have been unbiased strategy but to favor slightly the bearish sentiments.

Alternatively, on hedging grounds, one can also initiate shorts in futures contracts of mid-month tenors with a view to arresting bearish risks.

Currency Strength Index: FxWirePro's hourly EUR spot index is inching towards -53 levels (which is bearish ), while hourly USD spot index was at 95 ( bullish ) while articulating (at 05:35 GMT             ).