› Weekly binary options technical forecast April 27 - May 1

Weekly binary options technical forecast April 27 - May 1

USD/RUB: Bearish


The Russian rouble was vulnerable to the plunge of oil prices registered last Monday. As a result, USD/RUB soared to weekly high levels at 77.6500. However, the binary options market noted a sharp reversal of the price action and the U-turn amid the demand for put options for the currency pair. The exchange rate was declining throughout the rest of the trading week, offering a brilliant opportunity for a lucrative cycle of buying call options. The technical background was getting ready for such a scenario and several indicators delivered bearish signals on different timeframes. Currently, the intraday technical outlook is in favour of a bearish continuation scenario and here is why.
The four-hourly chart below shows an effective combination of technical indicators. The bullish momentum was exhausted at the peak on April 22, causing the counter-trend correction. After the USD/RUB currency pair crossed the Ichimoku Conversion line, which acted as the support curve, the indicator pointed to a likelihood of a deeper retracement southwards. The Average Directional Index confirmed the signal as -DI (red) and +DI (green) lines crossed each other, while the mainline started descending, underlining the weakened momentum. The Relative Strength Index dropped below the 50% threshold, confirming both bearish signals and completing the bearish reversal pattern.
Since the binary options market opened Monday with a bearish bias for USD/RUB, a further slide of the rate is likely. The current price keeps sliding on the back of sustainable demand for put options, breaching the basic support level of the Ichimoku Cloud, while the leading span is about to perform the bearish crossover. On top of that, the ADX main line started ascending again and breached the threshold, which means that the bullish momentum is rising. Therefore, we expect the pair to test a crucial support level at around 73.00/72.80, the bottom of the past trading week registered on April 12-15.

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EUR/GBP: Bearish


The EUR/GBP cross-rate formed a huge descending triangle in the 4-hourly timeframe with two failed attempts to test the resistance trendline recently. The baseline of the formation comes at 0.86820 and if the bears were able to breach it in a sustainable way, then the downtrend might accelerate the demand for put options. Another crucial resistance is equal to the 89-bars simple moving average, and it has already limited the latest bullish upswing of the exchange rate.
The MACD trend indicator is reflecting the weak momentum and low volatility as its histogram has narrowed the range and started charting small bars around the level of 0. Both MACD lines are stretching into the tight range as well. The Bollinger Bands %B indicator is also bearish but there is a technical divergence as the recent bottom is higher than the previous low. So before concluding the bearish breakout, the oscillator must break through the overbought threshold limiting the bearish action.
Given all that, there might be another attempt to test the resistance trendline by the bulls. Although the bullish whipsaw might be short-lived and limited in terms of the trading range, it could give an opportunity to start a new trading cycle of buying out options with 4-hours expiration time.
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GBP/AUD: Bearish


Since the Australian dollar was overperforming the rest of the major currencies, while the Sterling was ahead of the binary options market, the GBP/AUD cross-rate had an impressive bearish rally on the four-hourly timeframe. The chart below shows the pair in a sustainable downtrend inside the descending channel with narrowing borders. Such a pattern usually means a sharp breakout on the downside and an acceleration in the demand for put options.
The Parabolic SAR indicator is bearish with its dots jumping above the price on April 21. The Average Directional Index has both mainline and the positive surplus rising, which shows that the binary options traders are in the process of increasing the trading activity. In other words, the bearish momentum has further potential to keep weighing on the exchange rate.
The only concern for put-option buyers is that the sensitive Williams %R oscillator is extremely oversold due to the sequence of lower lows on the price chart. So any bullish whipsaw with a long upside shadow and the relatively small body of the 4-hours candle might allow the oscillator to reload the oversold conditions, while the bears could regain the momentum. Therefore, the sell-highs trading strategy is preferred with intraday reversal signals to monitor.

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Gold: Neutral


The price of gold is in a long-term uptrend but the short-term technical bias has changed to bearish thus binary options traders should consider staying out of the market for now. The hourly chart setup below shows that the bullish momentum has been exhausted as the price of gold failed to break through the horizontal static resistance at $1737.59 per ounce. As a result, the put-option buyers took the market under control and pushed the yellow metal lower.
The MACD trend indicator was signalling the bearish reversal as the peaks of its lines were descending. On top of that, the histogram has narrowed the positive surplus and dropped below zero recently. The Willaims Alligator confirmed the signal to start buying put options as its lines crossed each other and took the southwards direction. Support levels are coming at $1721 and $1715 in extension, so binary options traders should consider taking short-term profits and monitor the market in the scope of the long-term trend direction, which is still bullish despite the intraday reversal pattern.

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Brent Crude Oil


As far as WTI Crude oil price had an unprecedented event happened last week, we’d try to analyse the technical bias for the Brent Crude oil traded in London, just to avoid the technical misunderstanding with the timeframes and quotes.
The daily chart below shows a clear downtrend with growing bearish momentum and the row of lower lows in the historical bottom of the market. The last time Brent oil price was trading at such low levels was in April 2002.
The green descending trendline is nothing but a mid-term median coming through the largest bearish gap in the overseeable past. On top of that, the line acted as the resistance, confirming the importance of the Ichimoku BaseLine (see the red arrow on the screenshot below). Since then, the daily decline is consistent, while chances for a new bottom to be charted still persist. The market is currently consolidating amid three daily candlesticks in the green. However, the trading range is tight and the bullish performance is not convincing, so we expect further downside action in the oil market.

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