› Weekly binary options technical forecast May 11 - 15

Weekly binary options technical forecast May 11 - 15

S&P 500: Bullish


The S&P 500 benchmark kept climbing north last week amid sustainable demand for call options. The index had two series of bullish candles, offering quite lucrative trading cycles of buying call options with 4-hours expiration time. The first one started right on the market open, although the rate had a bearish weekend gap. It lasted till Tuesday mid-day when the index started consolidating on the back of overbought conditions. A bearish retracement followed, pushing the index down to the ascending trendline support and 89-bars exponential moving average, which limited the bearish action (see the green arrow on the chart below). Since then, the S&P 500 showed an impressive bullish rally, charting 85% of 4-hourly candles in the green.

The mid-term technical analysis points to a bullish continuation with an intermediate target at 2969.0 points, the recent peak of the market. If call-options buyers were able to break the index through that mark, then the road to all-time high value would be open. On the other hand, a bearish rebound is still possible, given the uncertainty related to the coronavirus pandemic. Binary options traders should keep their trading cycles limited, taking profits from a series of several deals in the money and obtaining the wait-and-see position.

Weekly binary options technical forecast May 11 - 15

EUR/USD: Bearish


The most popular currency pair in the binary options market dropped 200 pips on Thursday, but retraced back to the middle of the recent range. Although EUR/USD failed to breach mid-term technical support level, the sentiment remained bearish and further downside action is possible in the week ahead.

The exchange rate dropped below the 21-bars exponential moving average last week, while MACD and RSI indicators were pointing to a bearish continuation. However, a reversal signal came in when MACD lines crossed each other and RSI bounced above the 50% line. The MACD histogram turned positive, but the lines remained below zero.

Such a technical mixture could lead to a sideways consolidation with possible breakouts on both sides. The rate is hovering below the EMA21, so further slides are still on the table. Two support levels are placed at 1.0767 and 1.0727, reflecting the recent lows. Those handles are also crucial in terms of possible postponed demand from the side of call-options buyers, so put-options trading cycles should be stopped there.

Weekly binary options technical forecast May 11 - 15

NZD/USD: Bullish


The New Zealand dollar was gaining strength versus the US dollar throughout the past trading week on the back of strong demand for call options. The Reserve Bank of New Zealand has a meeting scheduled for this upcoming week, the NZD/USD currency pair might be vulnerable to a higher level of volatility.

The intraday technical sentiment turned bullish on the four-hourly timeframe below. The rate jumped inside the Ichimoku Cloud, and even breached the upper band of it, while the leading span performed the bullish crossover. Both Ichimoku lines went off the cloud and headed north, acting as support curves.

The best trading strategy is to wait for a bearish whipsaw during the week, find reversal signals on intraday timeframes, and start buying call options with 4- and 1-hour expiration time. RBNZ is expected to support the currency as the lockdown seemed to cause less trouble for the local economy compared to the US and Europe, so businesses might restart the activity much faster than previously anticipated. The long-term trend is bullish.

Weekly binary options technical forecast May 11 - 15

WTI Crude Oil: Bullish


The price of WTI Crude oil performed an impressive bullish rally, gaining more than +30% last week. After breaching the support trendline on the hourly timeframe, oil prices entered into the sideways consolidation channel slightly below the psychological mark of $30 per barrel. Williams Alligator’s lines are stretched into a tight range, confirming the previous suggestion that call-option buyers need to have a pause to regain the momentum and push the black gold further north. On the other hand, there is a bearish scenario as well. If the put-options buyers were able to fill the offer with enough trading volume, and breach the support of the range at $24.24 per barrel, then a deeper bearish retracement would be likely.

The key fundamental event to watch in the upcoming week is the US Crude Oil Inventories report, which is supposed to confirm that the demand is picking up and oil storages are drying out. If that confirmed, the price of oil could have another boost of buying call options and continue the recovery. Otherwise, one more wave of sell-off could weigh on the binary options market.

Weekly binary options technical forecast May 11 - 15

Gold: Neutral


The price of gold remained almost flat last week, having several attempts to test both bands of the recent range between $1680 and $1720 per ounce. The hourly chart below points to a mixed technical bias. On the one hand, the price of gold is in the bearish channel of the Bollinger Bands indicator, hovering below the middle line. Both bands of the indicator keep narrowing the surplus, which underlines quite a low volatility. On the other hand, fast and sensitive Stochastic RSI is reaching the overbought conditions. If the oscillator’s lines crossed each other above the threshold, that might lead to a bearish acceleration on the back of demand for put options. The long-term trend remains bullish though, so binary options traders should keep in mind that the downside potential might be quite limited in the week ahead.

Weekly binary options technical forecast May 11 - 15

USD/RUB: Neutral


The Russian rouble was supported by oil prices, although the currency had quite a limited progress of the recovery. USD/RUB declined -2.67% last week, closing Friday at 73.36 roubles per dollar. The hourly chart below shows a descending formation similar to an asymmetric triangle. An additional resistance is represented by an 89-hours simple moving average, which almost coincides with the descending trendline. The essential support is placed at 73.00 roubles per dollar, and if binary options traders were able to breach that horizontal barrier, then the price action could push the rate as low as 72.65 in the week ahead. Put options are preferable, given the recent technical sentiment, however, binary options traders should keep an eye on the price of oil as a potential bearish reversal there might lead to an opposite correlation with USD/RUB.

Weekly binary options technical forecast May 11 - 15


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