› Weekly binary options technical forecast August 5 - 9

Weekly binary options technical forecast August 5 - 9

EUR/USD: downside weekly whipsaw.

From the long-term point of view, the pair could have found a local bottom or even a reversal point. On the short-term outlook, EUR/USD remains vulnerable to the consolidative sideways range with a slightly bearish bias. The hourly chart below shows the whole past trading week, and it has three obvious cycles. First, the par was hovering around the same price levels as per the previous week. Second, the yellow price range was breached on the downside, and the bears accelerated purchases of put options. As a result of the 20-hours rally, EUR/USD had lost more than 100 pips of the exchange rate, charting 15 red candles (75%). And third, buyers of call options were back on track as the rate was strengthening till the end of the trading week, and even continued the intraday uptrend on Monday this week. If traders looked at the weekly quote change, the difference would be too small to consider, taking into account past performance. However, the short-term trading approach gave a decent number of profitable deals thanks to high volatility.

Parabolic SAR worked well this past week in a combination with ADX and DI indicator. Even though the secondary technical tool had a certain delay in the reversal signals, the overall confirmation was effective. Vertical lines on the 1-hour chart below divide the past trading week on the trading cycles described above. Currently, both indicators point to a potential bullish continuation, however, the upper band of the yellow sideways range should be watched closely in terms of possible trading signals to stop buying call options of EUR/USD.

Weekly binary options technical forecast August 5 - 9


GOLD: bullish breakthrough after bearish correction.

The price of gold had a similar action as EUR/USD this past week. However, the trading tools and technical signals, as well as the overall weekly result, were different. On a wider picture, the yellow metal had rewritten the highest weekly close price since May 2013, which might point to further appreciation of the safe-haven asset. As many sharp price swings often start, the bullish rally began after the bearish correction, which was nothing but a last attempt to push the gold price below the psychological support of $1400.

The hourly timeframe (see the screenshot below) clearly indicates a perfect moment to stop buying put options and start buying call options for gold. The Bollinger Bands indicator signalled a start of higher volatility as its lines spread on July 31 when the rate breached the lower BB band, charting a bearish breakthrough signal. Since then, the indicator also confirmed that the bears would keep buying put options as the continuation signal was charted several times when the hourly close price appeared below the bottom of the range. However, the technical sentiment reversed back to positive after the hourly candlestick had a long downside shadow with the close above the support curve (green arrow). Since then, call options were in demand as the bulls dominated the precious metal market.

It’s recommended to continue buying call options as the recent performance points not only to a bullish continuation but also for a possible acceleration of the uptrend on the long-term perspective. At the same time, intraday charts have to be watched closely in terms of bullish breakthrough signals or signs of a bearish retracement. The middle line of the Bollinger Bands indicator should act as the support curve for the intraday trading strategy.

Weekly binary options technical forecast August 5 - 9


GBP/CHF: Bearish acceleration.

The British Pound and wiss Franc were moving in different directions versus the U.S. dollar last week, which caused a sharp price swing in the GBP/CHF cross-rate. The pair had lost almost 3% on a weekly basis, accelerating the long-term downtrend, and shifting possible targets. The 4-hourly chart below is extremely bearish since Monday’s breakthrough when GBP/CHF crossed the recent support trendline. Fast RSI oscillator dropped to the oversold territory with extreme values, however, the lack of any bullish divergence might point to further bearish achievements. Buying put options would be lucrative in case if the RSI corrected north in the same way it did last Friday, even without any significant change of the rate. GBP/CHF could fall as low as 1.1450, the bottom charted right after the historic Brexit decision in summer 2016. Therefore, the bears have more room to push the cross-rate south. On the other hand, a bullish recovery above 1.2000 could signal that the local bottom has been found and the market players would switch to buying call options again.

Weekly binary options technical forecast August 5 - 9


USD/JPY: bearish reversal.

The U.S. dollar failed to continue the uptrend versus the Japanese yen last week. Most of the traders stopped buying call options for USD/JPY on July 31, while the next day brought a plunge as the pair was charted 95% of red candlesticks on the 4-hours chart since then. The Ichimoku trend indicator turned bearish as the span charted a bearish cross. All of the support levels were breached, and the USD/JPY currency pair had erased all of the gains started from June 25. The lower-lows sequence and the breakout of the strong psychological barrier of 116.00 yens per dollar indicate that the recent low of 104.82 might be re-tested. If that confirmed, USD/JPY could stall into a long-term downtrend.

Weekly binary options technical forecast August 5 - 9


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