NZD/USD Chartpack - Technicals & Trade Setup | January 28, 2019

NZD/USD hammer hammers rallies, does triple top pattern have more traction in major trend? Trade calls but uphold short hedge:

Technical chart and candlestick patterns: To begin the New Year,  NZDUSD   hammer pattern candlestick has been traced out at 0.6691 levels (3rdJan), ever since then the bulls have been attempting to counter last December month bearish pressures (refer daily chart ).

For now, the current price spike well above DMAs on the above-mentioned bullish formation, sensing stiff resistance at 0.6872 levels.

"Can it be a bullish reversal in the major terms" is still dubious. But in the short run, more rallies seem to be on cards upon bullish MACD crossover & intensified buying momentum signaled by both leading oscillators on the daily time frame.

RSI and Stochastic curves show upward convergence to the prevailing bullish rallies signal the strength and the intensified momentum in the ongoing interim uptrend.

However, although the interim bulls attempt to bounce but restrained at 21-EMA levels (refer monthly plotting), While bears likely to extend further on the triple top formation.

Observe steep slumps below EMAs on a breach below the neckline on this timeframe, this reminds us of the major downtrend as both leading and lagging indicators are still bearish bias in the major trend.

Trading tips: Contemplating above technical rationale in order to participate in the current uptrend but not to buck the major trend, those who are aggressively looking at this pair are advocated to trade at the money call options, this would bring-in leveraged yields as the implied volatility likely to surge due to the intensified underlying movement ahead of the Fed’s monetary policy that is expected to be on hold.

Alternatively, for those we foresee the long-term exposures, shorting futures of mid-month tenors have been advocated in the past with a view of arresting further potential slumps, we wish to uphold the same positions. 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 NZD spot index is inching towards 64 levels (which is bullish ), while hourly USD spot index was at -54 ( bearish ) while articulating (at 06:56 GMT ).