› Weekly binary options technical forecast April 6 - 10

Weekly binary options technical forecast April 6 - 10

WTI Crude Oil: Bullish

The price of oil jumped more than 30% this past week as traders rushed to buy call options after an announcement about a possible deal between Russia and Saudi Arabia to stop the price war and cut the global oil output to support the price. However, the weekend brought doubts that the deal is on the table as the OPEC+ meeting was postponed after another round of escalation between the two largest oil producers in the world.

The technical outlook points to a deep bullish retracement after the long-term downtrend. The four-hourly chart below showed a strong sign to start buying call options on April 1 after several technical indicators shifted the sentiment. Parabolic SAR changed the momentum to bullish as its dots jumped below the price. Although the trading week started with a negative gap in the price, the indicator is still bullish, suggesting an upside continuation. The Average Directional Index delivered a strong bullish signal after the red and green lines crossed each other, shifting the surplus to positive. The ADX mainline headed north, pointing to a growing bullish momentum.

The only concern for call-option buyers is that fast and sensitive Stochastic RSI peaked in the overbought zone, crossed the threshold from above and headed south. This might be a reflection of the negative gap as daily prices lowered on Monday morning. Therefore, it is very important to keep an eye on how the indicator will move near the middle level. In case of a clear and strong breakout from above, the bearish reversal might occur, sending oil prices back to the downtrend. Otherwise, if the oscillator’s lines bounced up from the middle barrier, then the bullish momentum will get back in play and buying call options would be lucrative. Nonetheless, it’s worth monitoring the news about a potential deal to cut oil production as the fundamental side of the equation might have a more significant impact on the price action than the technical one.

Weekly binary options technical forecast April 6 - 10

USD/RUB: Bearish

Thanks to the bullish rally of oil prices, Russian rouble strengthened versus the US dollar this past week. USD/RUB retraced off the peak, declining by -2.92% and finishing the trading week at 76.4000. What’s more, the foreign exchange market opened with a more bearish bias as traders kept buying put options for the pair. The intraday technical analysis points to a bearish scenario and here is why.

The Ichimoku leading span performed the bearish crossover (see the red arrow on the four-hourly chart below), shifting the surplus to negative. On top of that, the exchange rate and both Ichimoku lines appeared below the cloud, which completed the bearish reversal pattern. On top of that, the Relative Strength Index with a period of 14 bars has a serial bearish divergence (green line) with the sequence of lower highs and lower lows. The oscillator has enough room to go south before the oversold condition is achieved.

The nearest target for the bears and technical support level comes at 75.56 roubles per dollar. That is static horizontal support that used to act as the resistance in the period of March 9 - 16 before the bullish breakout and acceleration. Call options buyers had three failed attempts to break the rate through the defensive barrier before continuing the uptrend, so the same level might hold the bears in the week ahead. But if put-options buyers had enough volume to push the rate below that line, then USD/RUB would drop towards the next support level at around 70.9840. The resistance curve is descending and currently comes at 77.90.

Weekly binary options technical forecast April 6 - 10

USD/ZAR: Bullish

The South African Rand was the weakest currency among emerging markets as USD/ZAR soared +7.90% or 1394 pips (four-digit quotes). On top of that, the pair charted the highest rate on record, peaking at 19.0906. Although the pair has entered into unknown territory for the technical analysis, several factors point to a high likelihood of a bullish continuation in the week ahead.

First of all, such strong trends do not reverse just like that. USD/ZAR added 26.7% to the exchange rate in 6 weeks, which underlines the fundamental background of the trend. The main reason for that is a huge outflow of the investment capital from South Africa and expectations that the global economic crisis would hurt the local economy badly.

Second, the pace of growth accelerated as the past week’s candlestick has a large body, while shadows and tails are absent. That means that the bullish momentum is far from getting exhausted and the bulls do not meet any significant resistance from put-option buyers. In other words, the power of the uptrend is robust, signs of a potential reversal are absent.

Third, the daily chart below shows that all of the three technical indicators have more room to go north despite overbought conditions. In such an environment, there is no sense to look at fast oscillators as they will show nothing but extreme values. So the technical instruments shown on the chart are momentum indicators. The Average Directional Index has a growing bullish surplus and the mainline is not peaked yet, which points to enough momentum for the bulls to continue the rally. The momentum indicator has a sequence of higher lows and more room to go north. The MACD lines are rising and the distance between them is large, meaning that a possible bearish crossover is not on the table yet. The only concern for the bulls is that the MACD histogram might have a bearish divergence if the uptrend was unable to draw a higher peak in the upcoming week. However, the history of trading has many examples when strong trends continued, ignoring divergences. Call options are the only choice for USD/ZAR so far.

Weekly binary options technical forecast April 6 - 10

NZD/USD: Bearish

The New Zealand dollar was one of the weakest currencies among majors this past week. NZD/USD is in a clear downtrend, according to weekly and daily timeframes. Although a bullish rebound is possible in the short-term perspective, buying put options might be more attractive, considering several technical factors described below.

Williams Alligator is in the eating mode and the direction of its lines point to a bearish sentiment on the four-hourly chart below. The bearish crossover occurred last Thursday as the indicator reflected the demand for put options. On the other hand, fast and sensitive oscillators are heading north, reflecting the buying pressure during the Asian trading session on Monday. Williams %R jumped to the middle range but did not cross the 50% level, while Stochastic RSI went off the oversold zone. The middle line of both indicators is crucial in terms of assessing the momentum and trend direction as a result.

One of the trading scenarios suggests that NZD/USD is about to finish the bullish rebound shortly. If the call-option momentum was exhausted, then the bears would step-in with a heavy-volume demand for put options to continue the downtrend from the previous week. This is why it is recommended to monitor shorter timeframes and start buying put options in case of reversal signals. However, if the upside action lifted the pair above the upper line of the Williams Alligator (0.5934), then the bullish recovery could have a deeper continuation.

Weekly binary options technical forecast April 6 - 10

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