USD/CHF is trading at the bottom of the sideways range, which used to hold the exchange rate since September 2019. The bearish action might be limited unless a breakout of the support at 0.9800 happened. Past week’s performance shows that USD/CHF was in demand at that level as the buyers stepped in with heavy-volume buying of call options, limiting further slide of the pair. This is why a bullish bounce back to the middle of the range is possible before the downtrend will be renewed. The Simple Moving Average with the period of 89 days represents the median where the bears could re-enter the market, buying put options. So the bounce up to 0.9900 looks reasonable.
On the other hand, the MACD trend indicator is rather bearish with the histogram in the negative zone and both lines placed in the correct order to proceed with the downtrend. Fast RSI oscillator is bearish but far from the oversold threshold, so a comeback to the level of 50% is also likely. If the indicator bounced back down from it, that would be a perfect signal to start buying put options with the intraday approach (expiration time 60-minutes and 4-hours). The intraday technical outlook is neutral, so a clear signal should occur before expirations of 15- and 30 minutes would point to a further direction of the trend.
A sharp spike of the trading activity changed the technical sentiment for USD/JPY. The intraday chart setup below shows a period of high volatility starting from December 12. USD/JPY surged 90 pips in two hours and kept climbing north after that. However, put-options buyers were ruling the price action until the pair consolidated at around 109.30 yen per dollar. After that, the call-option cycle was profitable, although the pair had quite slow growth.
The Average Directional Index reflected that price action. Despite the growing bullish surplus of -DI and +DI lines, the mainline was declining, which pointed to a weaker momentum. Commodity Channel Index pointed out extreme levels where reversals took place. Currently, CCI and ADX are overbought, which could force the market players to add selling pressure on USD/JPY in the short-term perspective. However, the overall sentiment is bullish, and the uptrend should be resumed after a local bottom. Intraday buy-signals have to be monitored for the beginning of a new cycle to start buying call options again.
Awesome Oscillator and Relative Strength Index had a bearish divergence on the hourly timeframe (see the chart below), which started playing out on Thursday when AUD/USD peaked at the level of 0.6940. The main concern for the bulls is that the recent upside movement is nothing but a retracement from the long-term downtrend started this year. This is why call-option buyers face counter-trend action at strong resistance levels. This week was not an exception and the chart shows how fast AUD/USD bounced back down on the back of sustainable demand for put options. What’s more, both oscillators went into negative territory, signalling the bearish sentiment.
Currently, the pair is in a sideways consolidation with a tight range. Binary options traders should keep an eye on a breakout of the range in either side before making the analysis of whether to buy a call or put options. The awesome oscillator should cross the zero line before making any conclusions regarding further direction of the trend. The Relative Strength Index has to retrace to the middle level as the sequence of higher lows indicates the risk of bullish recovery. However, both bullish and bearish scenarios are possible in the week ahead, so traders should monitor intraday technical signals before entering the market with a new trading cycle.
Although the Canadian dollar was not the strongest currency among majors this past week, the USD/CAD has a stable bearish performance on the 4-hourly chart below. Despite the bullish rally on December 6, which was driven by the fundamental part of the analysis, the pair failed to get above the local resistance of 1.3250 approximately. That price action allowed analysts to draw the resistance trendline, which acted as the signal line to start buying put options afterwards. Every time the bulls were trying to lift the exchange rate to that resistance, put-options buyers were entering the market with heavy-volume offers, and USD/CAD used to bounce off the line.
On the other side, there is a median line connecting the local peak charted on November 13 with the local bottom noticed on December 6. This line should act as a support level for the bears to take partial profits and for the bulls to enter the market. Besides, there is a large demand for USD/CAD around that level from the side of real-money accounts (exporters and importers). As a result, the pair is in a narrowing descending channel. However, if the bears were able to push the rate through the support, the downtrend could accelerate to test the horizontal bottom at 1.3050, the lowest rate in six months.