› Weekly Binary Options Technical Forecast October 7 - 11

Weekly Binary Options Technical Forecast October 7 - 11

EUR/USD: Bullish reversal

Although EUR/USD printed the lowest daily close rate at 1.08986 on September 30 and tested the lowest year-to-date rate at 1.08792 on October 1, the pair charted a bullish reversal on intraday time frames. The hourly chart below shows three signals to start buying call options despite the long-term negative sentiment. The first signal to start the call-options trading cycle came along with Parabolic SAR switching its bias as the dots jumped below the price. The Bull-Bear indicator with 21-hours period shifted to the bullish sentiment as well, while Stochastic RSI remained in the positive territory. The second occasion appeared when Stochastic RSI was coming off the oversold zone on Wednesday, while two more signals occurred at the end of the trading week as all three indicators pointed to a bullish acceleration.

As a result, EUR/USD charted an ascending triangle pattern with horizontal static resistance at 1.09899 (the highest hourly close rate). The base of the triangle is equal to 57 pips, and a potential bullish breakthrough of the resistance might lift the pair towards 1.1047 in the week ahead. The current rate is rather close to the resistance and a bullish test looks imminent. However, binary options traders should monitor the sequence of higher lows as if it will be breached, the triangle pattern would not work any more. Therefore the support level at 1.0957 is crucial for the bullish continuation. If breached, put options will become more attractive, and the pair could slide towards 1.0900 handles again.
Weekly Binary Options Technical Forecast October 7 - 11

GBP/USD: Sideways consolidation

The British Pound was vulnerable to high volatility this past week as the British government was seeking ways to arrange the Brexit deal with the European Union. Thus, GBP/USD had both bearish and bullish spikes to 1.22086 support and 1.24030 resistance, respectively. At the same time, the yellow sideways range of 1.2273/2329 acted as a magnetic level to attract prices throughout the past trading week. The 21-hours Bollinger Bands had two false breakouts, which did not have any continuation as the market momentum was exhausted and the rate reversed. Currently, BB indicator points south, while GBP/USD opened the new trading week with a negative bias. Hourly rates are below the middle line, heading the support band at 1.2294. Buying put options is attractive, counting on the bearish breakout of both support levels. If that did not happen, the pair would keep hovering in the same yellow range, allowing binary options traders to benefit from multi-directional action.
Weekly Binary Options Technical Forecast October 7 - 11

USD/JPY: Bearish reversal

The Japanese yen gained strength versus all major currencies this past week, and the U.S. dollar was not an exception. USD/JPY had another failed test of the resistance level at 108.50, which was the crucial threshold to continue the long-term uptrend. Buyers of put options stepped in with heavy-volume entries on October 1, as the bullish momentum exhausted. 14-hours Relative Strength Index charted the reversal head-and-shoulders formation, the rate reacted with the bearish breakthrough of the Ichimoku Cloud trend indicator. Next, Ichimoku’s leading span performed the bearish crossover, signalling the trend’s reversal. Since then, the rate was trading below the Cloud amid strong demand for put options.

In the medium-term, the support level at 106.80 looks strong for the bears as it divides the recent bullish retracement from long-term bearish continuation. If the put-options buyers were able to overcome the call-options demand, then the market would eye 106.00 handle. The combination of RSI and Ichimoku Cloud should point to moments when the bearish power would be exhausted and a bullish correction would take place. Upside swings and whipsaws have to be considered as entry opportunities to renew the trading cycle of buying put options with the short-term scope. On the other hand, long downside shadows on hourly candlesticks might point to the strong support level and sustainable demand for call options, thus traders should stop the cycle with those signals.
Weekly Binary Options Technical Forecast October 7 - 11

NZD/USD: Bullish swing

The New Zealand dollar was one of the most sustainable gainers versus the U.S. dollar this past week. However, the uptrend began only after the bears failed to push NZD/USD through the psychological round-figure support at 0.6200. The last time such a low exchange rate was noticed in September 2015, four years ago. The bullish performance near the crucial support level points to the fact that the Kiwi was extremely oversold recently, and the downtrend does not reflect all fundamentals.

Coming back to the hourly chart (see below), it’s worth highlighting an interesting trading signal occurred on October 1 at around 2:00 PM GMT. MACD indicator switched the focus to bullish as its lines performed the bullish crossover, while the histogram turned positive. But the Average Directional Index had an inertia performance, although the mainline pointed to weakening momentum. Thus, NZD/USD only retraced from the local bottom until the confirmational signals came in from ADX as its mainline crossed the threshold and the surplus turned bullish. So far, the intraday technical sentiment remains in favour of the call-options buyers, despite the sideways consolidation started last Friday. The bearish action was limited in terms of price performance, while MACD reloaded the overbought bias, shifting the values towards zero. Binary options traders should monitor the support range of 0.6287/98 for potential trading signal to start buying call options for NZD/USD again.
Weekly Binary Options Technical Forecast October 7 - 11

USD/CAD: Bullish breakout

After hovering inside a tight sideways range with several failed attempts to break it through, USD/CAD had finally come out of the consolidation, breached the medium-term resistance at 1.3300 and headed towards 4-month high at 1.3380. The four-hourly chart below has a flag pattern, which points to a bullish continuation rather than a bearish reversal. Analysts highlight two main reasons for the Loonie’s weakness despite the sell-off of the greenback across the board. First, the price of oil breached the ascending channel and tested the support level at $51.00 per barrel for the fourth time in three months. Second, the overall risk appetite dropped amid weak macroeconomic data in the United States and concerns over China-U.S. trade negotiations.

From a technical point of view, if the bulls were able to breach the recent high at 1.3380, the long-term uptrend will be resumed and buyers of put options will be forced to remove postponed order above 1.3500/50, the range seen during the latest upswing in May 2019. If that happened, the downside action towards 1.3200 support would become a false attempt of the put-option buyers to push USD/CAD in the descending channel back. Thus, the overall market sentiment will turn extremely bullish. The rebound to 1.3300 support handle already took place, so it would not be easy for the bears to chart another swing south. Buying call options is attractive at this point, especially if traders have enough patience for long-term positioning on daily or weekly timeframes.
Weekly Binary Options Technical Forecast October 7 - 11

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