› Weekly binary options technical forecast October 21 - 25

Weekly binary options technical forecast October 21 - 25

EUR/USD: Bullish continuation

The most popular currency pair in the binary options market showed an exceptionally bullish performance this past week. The strength of the Euro versus the U.S. dollar was stable and gradual as the vast majority of binary options traders were keen on buying call options for the pair. Four active trading cycles were noticed on the hourly timeframe (see the chart below), each of them started with Stochastic RSI charting the bullish crossover and coming off the oversold territory. What’s also worth attention is that Parabolic SAR remained bullish throughout almost all of the trading week, underlining that the call options are more attractive despite several consolidative periods when Stochastic RSI was heading south.

The main technical sign not to start buying put options for EUR/USD was that the pace of decline during price correction was much slower compared to the speed with which Stochastic RSI used to drop. Longer-term analysis suggests a further appreciation of the pair as the significant technical resistance at 1.1150 was breached by daily and weekly quotes. Thus, the bears had lost one of the strongest defensive barriers on the road to 1.1250 and 1.1300 in extension. We recommend continuing purchasing call options for EUR/USD after short-lived bearish whipsaws and appropriate intraday technical signals.

Weekly binary options technical forecast October 21 - 25

GBP/USD: Extremely bullish performance

After testing the weekly bottom at 1.2516 this past Monday, the Sterling kept soaring versus the greenback four days in a row. The only concern for call-option buyers was an initially failed test of technical resistance slightly below the 1.3000 handle. Postponed orders for put-options were triggered and GBP/USD was falling four straight hours after that, reaching Thursday's low at 1.2557. However, the overall demand for call options was so strong that the pound reversed and continued climbing north throughout Friday. Monday open gaps are possible on both sides as crucial fundamental events are scheduled for this weekend. Nonetheless, the general technical sentiment is to continue the uptrend given the speed of recent rally.

All of the technical indicators on the hourly chart below are extremely bullish. The BullBear indicator and MACD were in the green for the entire past week, while the Bollinger Bands %B oscillator points to the bullish breakout signal. Based on that analysis, the bullish rally is likely to continue for the GBP/USD currency pair and other sterling cross-rates. However, the British Parliament could spoil all of those signals by rejecting Boris Johnson’s deal with the European Union. In that case, GBP/USD would crash as investors will rush buying put options.

Weekly binary options technical forecast October 21 - 25

AUD/USD: Bullish upswing

The Australian dollar had a mixed performance with a bullish bias by the end of the past trading week. The hourly chart below shows how the technical outlook was divided last week. Two short-term moving averages reflected the market’s sentiment was changing. As long as 21-hours simple moving average was below the 13-hours exponential moving average, buyers of call options dominated the market. However, after the first bearish crossover (red arrow), things changed and Aussie dropped to the weekly low value at 0.6727 in a 28-hours bearish streak. The trading signal was confirmed by Awesome Oscillator, which went into the negative territory (see the vertical mark in the indicator’s window).

Another reversal happened when call-options buyers stepped in on Wednesday. First, Awesome oscillator showed preliminary signs of a bullish reversal as its histogram turned green and started decreasing the negative value. Second, the AUD/USD hourly close rate breached both moving averages. Third, SMA21 and EMA13 performed the bullish crossover as a confirmation of the signal. Since then, the rate did not cross the EMA13 support back down, keeping the uptrend in play. There were several healthy retracements, but they only signalled another upswing rather than a bearish turnover. Until the hourly rate stays above EMA13, it’s worth buying call options.

Weekly binary options technical forecast October 21 - 25

USD/JPY: Slightly bearish bias

The Japanese yen remained flat versus the U.S. dollar this past week. There were several attempts to break through the tight consolidative range but all of them failed to do so. The price action can be divided into four phases: consolidative range 1, bullish breakout, consolidative range 2 and bearish slide. None of them offered a gradual price change to trade consistently using trading cycles for binary options. Several short-term fluctuations were profitable when USD/JPY was bouncing up and down from the bottom and top of consolidative ranges, as well as accelerating the upside or downside action after breakouts happened. Average Directional Index confirmed the indecisiveness of traders as it pointed out several changes of the technical sentiment. The overall surplus shifted to the negative territory though (the indicator changed the colour), and the pair went into the descending bearish channel. We expect USD/JPY to slide gradually this upcoming week in case if nothing crucial happens in the U.S. equity market. Binary options traders should monitor intraday bullish whipsaws and false breakouts to start buying put options for USD/JPY. Regardless, there is no clear trading signal so far.

Weekly binary options technical forecast October 21 - 25

USD/CAD: Bearish continuation

Although the Canadian dollar underperformed the rest of the major currencies in terms of strong action versus the greenback, the decline of USD/CAD was gradual and quite predictable. The currency pair had several obvious cycles repeated many times this week. Three or four hours of sustainable decline were followed by a choppy consolidation without clear direction. Signals to buy out options were coming from Williams %R when the oscillator was drawing a sharp upside swing in overbought territory. The bearish crossover of Stochastic RSI confirmed the start of the trading cycle. The opposite development in both oscillators did not lead to a significant upside price action of the pair thus it signalled nothing but the beginning of the consolidation and a perfect period to finish the trading cycle of buying put options. However, given the overall weak fluctuation due to low volatility and trading volume, it’s recommended to buy put options throughout three or four hours only, and stop opening deals after that. Buying call options do not make sense as the buying pressure is limited.

Weekly binary options technical forecast October 21 - 25

USD/MXN: Bearish slide

Since October 2, the Mexican Peso was declining sharply versus the U.S. dollar, reflecting the market’s demand for call options for emerging markets assets (put options for USD/MXN). The four-hourly chart below shows that the pair lost 750 pips or -3.78% in three weeks. The Ichimoku Cloud trend indicator turned bearish after USD/MXN breached the support range, and both lines became resistance levels after that. Every bullish attempt to test those resistance curves was coming together with a sharp rise of activity of put-options buyers as the market’s sentiment is quite bearish for USD/MXN in the long run. We’d suggest that the bearish rally will continue in the short-term perspective thus buying put options still looks attractive. Every bounce back up to test Ichimoku Conversion line resistance might signal a lucrative entry point of a new trading cycle on the four-hour timeframe.

Weekly binary options technical forecast October 21 - 25

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