› Weekly binary options technical forecast February 24 - 28

Weekly binary options technical forecast February 24 - 28

EUR/USD: Bearish

The most popular currency pair in the binary options market started the past trading week with a bearish continuation of the recent trend. The technical sentiment was in favour of put-option buyers till Thursday when the pair had found a local bottom. After a series of consolidative directionless intraday candles, EUR/USD began a bullish retracement towards the local resistance at 1.0850. Although the exchange rate bounced for more than 70 pips off the multi-month low of 1.0780, the overall technical outlook remains negative, and the pair is expected to keep declining in the week ahead.

Stochastic RSI oscillator was the first technical tool to signal the beginning of a retracement as its lines crossed each other in the oversold territory and started edging higher above the threshold. Even though the price action was not bearish, other indicators confirmed the reversal. Parabolic SAR shifted the bias as its dots jumped below the price, while the Average Directional Index performed a bullish crossover of +DI and -DI lines.

However, the demand for call options was short-lived and limited as Monday started with a sharp decline of EUR/USD. The activity of put-options buyers increased as fast and sensitive Stochastic RSI charted an opposite crossover. In the medium-term perspective, binary options traders should wait for a confirmation from Parabolic SAR and ADX indicator as the buying pressure could resume. On the other hand, if the local bottom of 1.0780 breached by the price, EUR/USD could extend losses in the week ahead as call-options buyers would be forced to retreat, moving their postponed buy-orders lower. The overall outlook is negative for the pair.

Weekly binary options technical forecast February 24 - 28

GBP/USD: Neutral

The British Pound was weakening versus the US dollar at the beginning of the past trading week as the fundamental news forced binary options traders to buy put options for GBP/USD amid worth-than-expected macroeconomic reports. The Bank of England was forced to change the economic outlook and postpone hiking the interest rates, adding the selling pressure on the Sterling.

On the other hand, technicals were preparing the background for such a scenario. The green candle on the four-hourly chart below was limited by the middle line of the Bollinger Bands indicator, which was a strong signal to start buying put options. The cycle continued till the pair dropped to a local low of 1.2849. Williams %R oscillator signalled a reversal by crossing the oversold threshold from below. Confirmation came in from Chaikin oscillator as the indicator started bouncing north with the accumulation momentum growing. The Bollinger Bands had two consecutive bars closed above the bottom line as well. So call-option buyers had a chance to gain a sustainable profit due to 8 green candles in a row.

The fact that the upside action was limited by the mid-term descending trendline (see the screenshot) confirms that the currency pair has a mixed technical bias with directionless sideways price action as the most likely scenario. This is why binary options traders should keep their trading cycles tight and consider decreasing the expiration time down to 60- or even 30-minutes. So far, Chaikin oscillator, Bollinger Bands and Williams %R point to bullish momentum, which could be rapidly changed if GBP/USD breached the support range of 1.2900/25.

Weekly binary options technical forecast February 24 - 28

USD/JPY: Bullish

The Japanese yen was the weakest currency among majors versus the US dollar this past week. USD/JPY accelerated the uptrend, soaring to 7-months high above the psychological resistance of 112.00 yens per dollar. Call options were in demand as the Relative Strength Index was already above the middle line, while the price formed a bullish pattern after appearing above the Ichimoku Cloud. After a series of four-hour candlestick in the green, USD/JPY halted the upside action as intraday oscillators were extremely overbought, while the rate went too far from Ichimoku Conversion line. Friday came under the sign of a bearish retracement, which pushed the rate below the support curve.

As far as the current rate is between Conversion and Base lines, it is worth expecting USD/JPY to have a deeper bearish retracement. The most crucial support level, in this case, comes at around 110.94, and if the put-option buyers were strong enough to push the rate lower, then it could slide towards the upper band of the cloud at 110.65 and 110.30 in extension. An alternative scenario is more likely though. According to the mid-term analysis, USD/JPY is in the uptrend, which means that a bullish bounce for the support curve might happen. Thus binary options traders should get ready to start buying call options in case of an intraday reversal signal. The weekly target is the recent top at 112.19 and 112.50 in extension.

Weekly binary options technical forecast February 24 - 28

USD/CHF: Bearish

The USD/CHF currency pair topped out at a strong horizontal technical resistance level slightly lower than a round-figure handle of 0.9850. From a technical analysis point of view, that reversal could have much more significant consequences than some of the binary options traders thought. The thing is that there comes a strong threshold dividing the uptrend from the downtrend action. During the consolidation period in Autumn 2019, USD/CHF had support here, and now this level acts as the resistance. If the bearish slide confirmed, then the selling pressure might push the exchange rate as low as 0.9630 in a four-weeks perspective. Binary options traders should monitor the key level of 0.9780 as if the bears were able to break the price through it, then a bearish acceleration would take place with an attractive trading cycle to buy put options with 1- and 4-hour expiration time.

Weekly binary options technical forecast February 24 - 28

AUD/USD: Bearish

The Australian dollar keeps falling versus the greenback and other currencies. The past trading week brought another negative record in terms of 11-year lows achieved by the bearish trade. Despite a short-term rebound last Friday, put options are expected to be in demand for the week ahead and here is why.

The intraday technical sentiment is extremely bearish. Williams Alligator is in the eating mode with quite a large distance between the lines, which suggests a bearish continuation. On top of that, the recent bullish upswing was limited by the green line of the indicator, which acted as the resistance curve. Next, the MACD trend indicator is in the negative territory with growing histogram in the red and a large bearish surplus between the lines. The Relative Strength Index had a bullish bounce, coming out of the oversold zone, which gave a chance for put options buyers to restart the trading cycle. During the Asian trading session on Monday, AUD/USD continued the bearish slide, which was reflected by the RSI oscillator coming back into the weak territory. All that points to the attractiveness of put options for AUD/USD.

Weekly binary options technical forecast February 24 - 28

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