› Weekly Binary Options Technical Forecast September 23 - 27

Weekly Binary Options Technical Forecast September 23 - 27

EUR/USD: Bullish retracement is over


Although EUR/USD was trying to test the upper side of the recent consolidation range, the bulls failed to print any significant achievements. What’s more, the bears had won the battle last week, pushing the exchange rate extremely close to the crucial support of 1.1000 dollars per euro.
Despite the long-term technical sentiment which helped to identify the general direction of the trend, the intraday price action was not so clear and obvious. The bulls were fighting for crucial support levels, reversing the action on the one-hourly chart below several times this past week. The choppy trading conditions and comparatively high volatility made the combination of Parabolic SAR indicator and Stochastic RSI oscillator the most effective pair to trade binary options with 60-minutes expiration time.

The screenshot below shows several examples of profitable trading cycles when the Parabolic SAR indicator’s dots were jumping above or below the price, confirming the trading signal from Stochastic RSI which was coming off the oversold or overbought zone. In some cases, Parabolic SAR had a lagging effect to confirm the signal, but that’s just because of Stochastic RSI as the oscillator has a much more sensitive mathematical formula. Put options might be in demand in the upcoming week, however, the number of trading cycles to buy call options might remain the same as per the previous week. Therefore, intraday signals have to be monitored closely.
Weekly Binary Options Technical Forecast September 23 - 27

GBP/USD: Bearish reversal


The British Pound was also vulnerable to higher volatility and a large number of changes in the trend’s direction. Initially, the GBP/USD currency pair was continuing the downwards movement from the previous week but found a bottom at around 1.2397 early Tuesday. Since then, the pair had charted an ascending channel with parallel trend lines (which is quite a rare event for the British Pound), topping out at 1.2569 (the highest hourly close last week). After retracing to the bottom of the channel and breaching its support, GBP/USD bounced back up to the former support, now resistance and accelerated the downtrend from there.

Relative Strength Index and Williams %R Oscillator worked together to confirm each other in terms of reversal signals this past week. The current sentiment is bearish but both indicators reached the oversold territory, which suggests that a bullish retracement is required to reload them. After a bounce North, the downtrend should resume the selling pressure as the general technical sentiment on longer timeframes is still bearish despite recent bullish achievements. Therefore, resistance levels might be shifted lower for both RSI and Williams %R, while bearish divergences could be registered below the middle line. Put options are more attractive but the length of the trading cycle should be kept short and reversal bullish signals have to be watched closely on intraday timeframes.
Weekly Binary Options Technical Forecast September 23 - 27

USD/CHF: Bearish reversal


The Swiss Franc was weakening versus the U.S. dollar at the beginning of the previous week as binary options traders were mostly buying call options. As a result, an ascending trend was formed and a support trendline was drawn as an indicator of bearish bounces. Once the support was breached, the price action turned into sideways consolidation (yellow channel on the 60-minutes chart below).

What’s interesting, Awesome Oscillator acted as a leading indicator before the bearish breakthrough happened as its histogram was declining towards the level of zero. Once the Bollinger Band indicator had a bearish breakthrough signal, and the rate breached the bottom line, promising lower prices, AO turned negative one hour later. Such a combination of strong bearish signals points to further demand for put options for USD/CHF, which was already confirmed by the action early Monday as the pair breached the yellow consolidation range on the bottom side. It’s worth expecting further demand for put options till at least 0.9869 and 0.9850 in extension. However, after reaching the support level, USD/CHF might have another round of sideways consolidation, and the put-=option trading cycle might be put on hold.
Weekly Binary Options Technical Forecast September 23 - 27

AUD/USD: Bearish acceleration


The Australian dollar was one of the weakest major currencies this past week. AUD/USD dropped 115 pips (-1.66%) on a weekly basis after two-weeks bullish bounce was limited by the long-term resistance level at around 0.6884. Despite the sustainable demand for put options for AUD/USD throughout the whole trading week, the hourly chart shows several short-term periods of call-option spikes. The chart below illustrates how to use trading signals from the Ichimoku Cloud trend indicator during sharp trends. Once AUD/USD was retracing towards the resistance range between Ichimoku BaseLine and the bottom of the span, buyers of put options stepped in, pushing the rate lower with a longer period in terms of the number of declining hours. That gave at least three opportunities to gain profits on the downtrend of AUD/USD. The technical sentiment remains bearish and the Aussie should keep the same pace of the decline versus the greenback in the upcoming week. Thus, put-option trade seems to be more attractive. Traders should watch the action in terms of bullish whipsaws to enter the market.
Weekly Binary Options Technical Forecast September 23 - 27

NZD/JPY: Bearish continuation


The New Zealand dollar charted one of the most sustainable trends versus the Japanese yen recently. The 4-hourly chart below shows that the number of red candlesticks is reaching 75% since the bearish reversal on September 12. Ichimoku Cloud trend indicator signalled put-option cycles three times in a row. The first sign came in when the leading span performed the bearish crossover (red arrow). The second signal was noticed when the rate breached the Base Line support. And the third confirmation came together with the breakthrough of the Conversion Line. As a result, NZD/JPY is in a strong downtrend and the best expiration time to buy put options is 4-hourly chart as it smoothes out possible fake bullish whipsaws and allows mid-term binary options trader to gain on a sustainable trend with high efficiency. So far, the technicals point to a bearish continuation rather than a bullish reversal.
Weekly Binary Options Technical Forecast September 23 - 27


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