GBP/AUD Chartpack - Technicals, Trading & Hedging Setup

GBP/AUD Gravestone Doji Pops-up At Channel Resistance To Resume Downswings – Trading & Hedging Setup:

Ascending channel patterns have shown their effects GBPAUD’s minor and major price uptrends as stated in our previous post (refer both daily and weekly charts).

In this upside travel, the pair has broken-out previous channel resistance which is observed as the key obstacles for more rallies. 

But for now, bears, have resumed at the channel resistance upon the occurrence of gravestone doji at this juncture. The bearish pattern has occurred at 1.9364 levels followed by a bearish candle with large real body to nudge prices below 7 & 21-DMAs. Consequently, more slumps seem to be on cards as both leading and lagging oscillators turn towards bearish sentiments.

Both RSI and Stochastic curves show downward convergence to the prevailing dips to indicate the intensified selling momentum. While the current price sliding below coupled with bearish MACD crossover is indicating downtrend continuation.

On a broader perspective, the intermediate trend also spikes through the rising channel (refer monthly chart), bears resume at the channel resistance at 1.9523 level and plunged back the current 1.9070 levels (while writing).

The current price is attempting to slide below 7-EMAs as both leading oscillators signal overbought momentum on this timeframe as well.

Trade tips: One trading grounds, at spot reference: 1.9070 levels, we advocate executing one touch put option strategy with lower strikes at 1.8949 levels, the strategy is likely to fetch leveraged yields as long as the underlying price keeps dipping further towards lower strikes on the expiration.

Alternatively, on hedging grounds, contemplating above technical rationale, we advocated directional setup in our earlier post, we wish to roll over shorts in GBPAUD futures contracts of January’19 delivery and simultaneously, longs in futures of December’19 delivery. Thereby, the foreign traders, who are exposed GBPAUD receivables/payables, can arrest their FX exposures.