Contents:The binary options market was moving mainly in one direction because of the sustainable demand for call options of high-yield assets such as stock indices, emerging markets currencies, and commodities. In contrast, safe-haven assets were trading in the put-mode last week as the vast majority of binary options traders were betting on fast recovery of the global economy after the coronacrisis.
WTI Crude Oil: Call
The oil market kept recovering last week as the market expected the global trade to renew, as well as travel to recover and ground transportation to restart. As a result of the speculative demand for call options, WTI Crude Oil added +11% to the price, charting sixth weekly candle in the green. The daily timeframe is also headed north as more than 90% of candles are positive. So buying call options for WTI Crude could be reasonable, although traders should consider choosing longer expiry time such as 4- and 24-hours.
The technical outlook is bullish on the daily chart setup below. Williams Alligator is in the eating mode as all of its lines are placed in the correct order to proceed with the uptrend. The MACD trend indicator is positive, the histogram is green, although the length of its bars eased somewhat compared to the previous bullish spike. Relative Strength Index is well above the middle level, while the overbought territory is far above, which leaves more room for the price of WTI Crude Oil to go up.
The Russian Rouble reflected the price of oil, weighing on the USD/RUB exchange rate. Most of the binary options traders were buying put options for the pair, which declined -2.27%, falling below the psychological round-figure mark of 70.00 roubles per dollar. From a technical point of view, USD/RUB is in the process of completing the bearish reversal pattern on the weekly timeframe (see the screenshot below). Williams %R indicator is neutral as the bullish eating mode came to an end after two lines crossed each other. The MACD trend indicator extended the value of the bearish histogram, both lines spread the surplus, heading south. Relative Strength Index confirmed both previous signals as its value dropped below the 50% level, underlining the bearish momentum.
Several key technical levels are placed above and below the current exchange rate. On the upper side of the current range, resistance levels are coming at 69.07 (highest weekly close rate in December 2018) and 70.00 (psychological mark). On the downside, put-option buyers eye 66.67 roubles per dollar as the nearest target (the highest weekly close in August 2019) and 64.06 (local top in November 2019). When it comes to the trading strategy, binary options traders might consider buying options with short-term expiry such as 4- and 1-hour as the basic trend completely depends on the fundamental picture across the globe. If the oil market kept recovering, the OPEC+ deal with Saudi Arabia reached and the geopolitical tensions eased, then the rouble could keep recovering. Otherwise, another wave of the capital outflow from Russia might influence a spike of the USD/RUB exchange rate.
When it comes to shorter time frames, the technical sentiment is bearish. The 4-hours chart setup below shows a sustainable downtrend amid robust demand for put options. Parabolic SAR underlines the selling pressure as its dots are placed above the current rate. The Average Directional Index performed the bearish crossover, increasing the surplus of put options, while the mainline dropped back to zero. Stochastic RSI entered into the oversold territory, however, oscillators’ lines did not cross each other yet, so USD/RUB might ignore short-term oversold conditions.
The most popular currency pair in the binary options market has completed a bullish reversal pattern on multiple timeframes. The vast majority of traders were buying call options for EUR/USD with 24-hours expiry time. As a result, the pair charted 8 straight daily candles in the green starting from May 26. Last Friday also started with an upside swing, however, put-option buyers entered into the market with heavy-volume demands, so EUR/USD reversed the action and slid back to the local support level at 1.1300. Nevertheless, the long-term outlook is still bullish, and here is why.
The daily chart setup below shows that the pair went off the upper band of the ascending channel, breaching the resistance trendline (blue). Besides, EUR/USD breached the narrowing triangle formation on the upside. On top of that, the rate is currently well above the 89-days simple moving average that turned north. Given all that, EUR/USD could keep strengthening in the week ahead.
Friday’s rebound was limited by the former resistance now support trendline, which is a positive sign for the uptrend to continue. If the fundamental environment maintained the same sentiment, call-option buyers could increase the buying pressure, lifting the rate further north. Pivot points are placed at 1.14000 (round-figure psychological resistance) and 1.1500 (recent top). Binary options traders should consider those levels as long-term targets because the normal trading range for EUR/USD is 100 - 150 pips per week. Therefore, targeting too high levels too soon might be dangerous for profitable trading.