› Weekly binary options technical forecast April 20 - 24

Weekly binary options technical forecast April 20 - 24

EUR/GBP: Bearish

The single European currency weakened versus the British pound for the fourth week in a row on the back of strong demand for put options across the board. EUR/GBP is the most liquid cross-rate in the binary options market, and such a one-way action reflects fundamental processes influencing the market nowadays. The technical analysis points to a high likelihood of a bearish continuation and here is why.

The weekly chart setup below shows a descending channel. The resistance trendline of it has been built by connecting two highest weekly close rates on August 5 and March 16, respectively. The support trend line is a parallel clone connecting lowest close rates of bearish candlesticks on December 9 and February 10 with a bottom in March 2019. The current rate is in the middle of the descending range approximately, which is confirmed by the simple moving average with a period of 34 weeks coming at 0.8652 pounds per Euro. This is exactly the support level and a target for the bears for the week ahead. If the put-option buyers were able to breach that support, then the downtrend would enter into the lower range of the channel. Otherwise, binary options traders would register a bullish retracement.

Despite the four-weeks decline, other indicators are still bullish, which creates a certain divergence with the price action. The MACD trend indicator is positive with the histogram having green bars and both lines coming in the bullish territory. The level of zero is the threshold for the indicator to divide the technical sentiment from bullish to bearish and it’s not achieved yet. The same situation is for the Relative Strength Index with a period of 13 days. The oscillator bounced off the local peak but remained above the middle line, which points to a bullish bias. Therefore, technicals point to a possible end of the put-options trading cycle and a potential rebound toward the resistance range of 0.8800/50.

Weekly binary options technical forecast April 20 - 24

USD/CHF: Bullish

Although the USD/CHF currency pair remained flat on the weekly timeframe with long shadows on both ends, the intraday technical picture is much more attractive for trading binary options with 60- and 30-minutes expiration. The hourly chart setup below points to a clear ascending channel with the sequence of higher highs and all signs of the continuous uptrend. On top of that, the resistance trend line is a parallel projection of the support connecting the lowest hourly close rates. The price action on Monday shows that put-options buyers are interested to step into the market at around the upper line of the channel, while the hourly candle reminds a Doji-star reversal pattern.

Williams indicators are mixed with a more bullish bias than the chart itself. The Alligator made a bullish crossover and turned into the eating mode as all of the lines are headed north. The Williams %R oscillator bounced off the overbought zone, reflecting the bearish slide, but remained above the local bottom. Such a formation points to strong demand for call options in the mid-term perspective.

Weekly binary options technical forecast April 20 - 24

USD/CAD: Bullish

The Canadian dollar lost a straight correlation with the price of oil, which is quite unusual for the fundamental environment. USD/CAD had a bullish spike and a test of 1.4200 resistance (1.4182 high rates) last week. Although the pair bounced back to the 1.4000 figure, the bullish potential prevails, according to the intraday technical analysis.

The hourly chart below shows most of the indicators ready to continue supporting the exchange rate. Parabolic SAR is bullish with its dots jumping below the price early Monday. The Average Directional Index points to a weak momentum as its mainline bounced back below the threshold after peaking last Thursday. However, the surplus between -DI and +DI is bullish as the green line is above the red one so far. The only concern for the call-options buyers is that Stochastic RSI is overbought and both lines are declining which does not leave room for the oscillator to grow. This is why the market might have a temporary sideways consolidation before continuing the upside pressure. Such a sideways action can help the oscillator to reload the overbought conditions and regain the bullish momentum. So a postponed trading cycle of buying call options at around the American trading session might be lucrative in the week ahead.

Weekly binary options technical forecast April 20 - 24

WTI Crude Oil: Bearish

The black gold lost more than 20% of its value last week, reached the lowest price in 18 years and continued plunging on Monday. Most of the world’s oil producers face a nightmare price of $15 per barrel, global storage facilities are full of crude oil, while the consumption shrank to record lows. It is hard to imagine that the price of oil was trading at around $60 per barrel only a couple of months ago. Nevertheless, the cruel reality has several more pessimistic scenarios in reserve.

The last time WTI Crude traded at around $15 per barrel was in March 1999. The bottom of the oil market was at $10.92 per barrel in 1998, which is 50% more to plunge. As far as the trend direction is clear, binary options traders should just choose the right timeframe to buy call options. In our opinion, the four-hourly timeframe is perfect as the ratio of red-to-green candlesticks is high, fake whipsaws and retracements are absent, while the technical outlook is clear.

The chart setup below shows the consecutive decline of the Relative Strength Indicator with lower peaks and lower lows representing moments to start and stop the trading activity, respectively. The Gann Pitchfork reflects the recent bullish retracement as it has several descending channels as the result. The ranges are divided by resistance and support trendlines signalling intraday pivot levels. The recent plunge of the price sent quotes trading at the very bottom of the range, so a bullish rebound might happen before oil will resume the freefall. Therefore, it would be reasonable to wait for a better price before starting a new cycle of buying put options for those traders who missed the chance to join the party.

Weekly binary options technical forecast April 20 - 24

Gold: Bearish

The price of gold had a bullish rally last week amid the demand for call options. After testing 7-year highs at $1747, the yellow metal reversed the price action and erased all of the previous gains as such a high price triggered a huge wave of postponed orders for put options. As a result, the price of gold closed Friday at $1674 per ounce (below the crucial technical support of $1680) and continued declining on Monday. The short-term technical outlook points to a high likelihood of a bearish continuation.

The hourly chart setup below is bearish with the current price in the downside channel. The Bollinger Bands indicator is descending with the middle line at $1683 and falling. In other words, the price of gold is under the selling pressure. The upper line and the Moving Average with a period of 50 bars represent an extended resistance range with pivot points at $1696 and $1700 per ounce. This range is attractive for a reversal trading strategy when the call-options cycle is getting exhausted and the put-options cycle begins. However, that’s an optimistic scenario as the short-term momentum points to a bearish option with nearest targets at $1671 and $1661 for the upcoming week.

Weekly binary options technical forecast April 20 - 24

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