EUR/USD: bearish breakthrough.
The most popular currency pair charted a bearish breakthrough and printed the lowest exchange rate since July 2017. The hourly chart below shows all of the price action last week. WHat’s interesting is that the bulls did not give up the round-figure support of 1.1100 that easy, and even lifted EUR/USD towards the upper trendline of the descending channel. That powerful rally confirms that the bears would not crack the support nut that easy, and bullish bounces are still possible. However, given the recent demand for put options, the pair is stick to 1.1125 handles, which would reinforce binary options traders’ attempts to breach the horizontal support and make another run towards the psychological mark of 1.1000 dollars per euro. That level was not seen since the bullish breakthrough in May 2017.
The intraday technical outlook is extremely bearish as MACD is in negative territory without any sign of a bullish divergence yet. Fast RSI oscillator is well below the threshold of 50%, indicating strong bearish momentum, and having a lot of room to go further south before the oversold level is achieved. Any price swings towards the upper band of the intraday range should be considered as chances to start buying put options. Intraday reversal signals, long shadows on hourly candlesticks and false tests should be comprehended as entry signals. Pivot points are as follows: 1.1138 and 1.1150 as resistances, and 1.1100 and 1.1076 as nearest supports/targets for intraday price action.
GOLD: consolidation range with corrective side.
Spot gold was trading in a tight sideways range this past week. The bullish action was limited by the highest hourly close price of $1431.35 per ounce, while the bottom was charted at $1411.87. The Bollinger Bands range indicator charted two breakouts on both sides during those spikes, and there is an assumption that both signals were false as the breakthrough was not confirmed by further trend. Asa result, the price of gold ended the trading week near the middle line of Bollinger Bands, pointing to uncertainty in the binary options traders’ sentiment. Therefore, both call and put options are potentially in play, but the entry-level should be shifted towards the top (for put options) and bottom (for call options) borders of the range mentioned on the chart below. The longer-term outlook suggests that the gold price is still in the uptrend until the support level of $1400.00 holds the bears from further southwards action. Conservative traders should expect the yellow metal to re-test the deepest support range before reversing and going far North with a target above the recent high of $1453.00. Otherwise, the ascending formation would be breached and gold could extend losses below $1400 and $1380.
GBP/USD: Bearish continuation with a potential rebound.
On a long-term perspective, the British Pound is vulnerable to a bullish correction. Although the downtrend continued recently, and the pair had renewed 2-year lows, the bearish momentum is getting exhausted, while daily fast oscillators are getting extremely oversold. What’s more, there is a threat of a bullish reversal divergence to occur on MACD trend indicator with the daily timeframe. So far, 13-days Relative Strength Index confirms the divergence as the oscillator charted higher lows recently. Two green lines point to the diverging signal on the chart below. Therefore, binary options traders might start buying call options and lift GBP/USD toward the descending median line and 55-days simple moving average at around 1.2617. Long-term conservative investors should consider starting new put-options cycle around that resistance in case if reversal signals occurred on intraday timeframes. On the other hand, if GBP/USD breached the descending formation on the downside, such a price action might be considered as a false breakout with possible southwards whipsaw and sudden bullish reversal.
USD/CAD: Bullish retracement is coming to an end.
The Canadian dollar was weak recently as USD/CAD failed to breach a strong support level at around 1.3000. Asa result, investors started buying call options for the pair, lifting the exchange rate towards local resistance of 1.3200 round-figure level. The four-hourly chart below shows the bullish reversal and the retracement, which might end shortly due to several technical signs. First, the upside action was limited below 1.3200 with an obvious reversal candlestick pattern. Second, the 61.8% Fibonacci Retracement level from the downtrend since May 31 held the rate from further appreciating. Third, USD/CAD went far from the 89-bars simple moving average. Although the Parabolic SAR indicator is still bullish and its dots are placed below the price, a bearish reversal is expected. Binary options traders might switch to put options once Parabolic SAR changed its sentiment to negative. However, another upside run to 1.3219 resistance might take place, allowing investors to start the trading cycle with more attractive prices. Mid-term targets are the same as previously: 1.3100 and 1.3000 in extension.