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AUDUSD Intraday Binary Options Strategy
The Australian Dollar (AUD) suffered from irregular volatility in the Forex market along with the New Zealand Dollar (NZD). AUDUSD dropped over +150 pips in matter seconds before reversing higher. Such movements were more frequent during the 2008 financial crisis and have taken many forex traders by surprise. Fortunately, we have predicted moderate gains in GBPNZD and were able to partially capitalize over the instability.
Since the extraordinary event AUDUSD was able to correct higher an a rather attractive trend that may appeal to many binary options traders.
AUDUSD 60min Chart
Please click on the chart to enlarge:
AUDUSD 60min Chart 28/08/15
AUDUSD is trading with a bullish channel as we highlighted on the 4hr chart. The natural key levels would be the supports and resistance levels that define the channel (in pink). Traders would look for put options at the resistance and call options at the support. To determine the required expiry traders may observe the 15min chart upon a re-test of either support or resistance and seek a technical confirmation for the trade. Short-term expiration such as 60 seconds or 2 minutes may be inappropriate to take off these levels.
0.7175 however may be more suitable for short-term expirations. When the market re-test 0.7175 the weakness may be contained at first test. A technical confirmation must be provided on the 15min chart in order to take the trade. The 0.7175 re-test is not limited to short-term binary options but larger time frames may be exercised as long as they remain under 60 minutes. A technical confirmation means a reversal pattern or a divergence in one of the indicators for example.
A break below 0.7175 may suggest further weakness is expected towards the lower end of the bullish channel. A successful re-test may suggest the uptrend remains intact and dip-buying strategies may be exercised. Any attempts to break below the channel will be met by a strong support at 0.7153. A break below 0.7153 indicates the uptrend may have come an end and further losses are expected towards 0.7098.
It is essential to pay attention to 0.7208. Over time the upper resistance of the bullish channel will be above 0.7208. Rather than considering put binary options off 0.7208 when it is tested by the market, a breakout strategy via call options may be a more appropriate approach. A firm break above 0.7208 may lead to further gains towards the upper resistance of the tunnel.
In a scenario where AUDUSD breaks above 0.7208 further gains towards 0.7231 may be seen. The latter resistance (0.7231) is expected to hold on first test. A break above 0.7231 will require a new trading strategy due to lack of indication at the time of this writing.
For general reference, the Reserve Bank of Australia (RBA) monetary policy meeting is due next week. In light of AUDUSD selling in the Forex market there are no expectations for the RBA to cut rates.
30/08/15 UPDATE: AUDUSD resistance and support levels held well as you may see form the 60min chart.
Please click on the chart to enlarge:
When 0.7153 was breached it acted a resistance level until the market broke above. 0.7175 remains the key resistance levels. Multiple entries were provided in AUDUSD based on our market analysis.
Last Updated on September 6, 2015