FxWirePro: NZD/JPY Breaches Baseline of Rising Wedge, on Verge of Breaking 73.401 - Cash or Nothing Binaries

FxWirePro: NZD/JPY Breaches Baseline of Rising Wedge, on Verge of Breaking 73.401 - Cash or Nothing Binaries

24 May 2016, 07:44
Roberto Jacobs
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FxWirePro: NZD/JPY Breaches Baseline of Rising Wedge, on Verge of Breaking 73.401 - Cash or Nothing Binaries to Speculate

Ever since the slumps from rising wedge resistance at 74.824 levels, the pair has been consistently tumbling.

Bears have again been active to push back southwards breaking support at 73.863 levels.

The current prices have dropped below DMAs, 7DMA crosses below 21DMA which is a sell signal.

On monthly chart, even though prices have slightly jumped above 74.478 it has remained well below 7EMA, currently it is on the verge of retesting 72.806 sooner or later.

The current prices on monthly remained well below 7&21EMAs.

MACD signals bearish trend to prolong ahead.

Massive volumes on declining streak is conformity to the strong downtrend.

The leading oscillators have been converging downwards below 41 levels, subsequently, stochastic curves have reached oversold territory but there is signs of bullish crossover.

Hence, if it does not manage to hold onto 73.401 levels on a closing basis we could foresee dips upto the next immediate support only at 73.037 levels and bears may even drag upto 72.806 levels again in medium run.

Trade tips:

The current ATM IVs of NZDUSD are spiking at 14.96%, risk averse bears should wait for breach of 73.401 to initiate fresh shorts, otherwise last week's upswings may prolong.

Alternatively, the trade strategy for such classes would be the boundary binary options on intraday speculation basis.

Buy cash-or-nothing options using boundary binaries for targets around 40-50 pips.

Upper strikes - 73.653; lower strikes at 73.278.

The trading between these strikes would derive certain yields in this puzzling trend and more importantly these yields are exponential from spot FX.

For cash or nothing, these options would be exercised if the forward prices to remain between both strikes (i.e. 73.653 > Fwd price > 73.278).

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