Euro: USD/EUR (EUR=X) in the middle of the overall consolidation

Euro: USD/EUR (EUR=X) in the middle of the overall consolidation

The Euro fell slightly during the trading session on Wednesday but quite frankly we are in the middle of the overall consolidation range that I have been tracking. The 1.11 level on the bottom is support while the 1.12 level above is resistance. The resistance even extends all the way to the 1.1250 level, so it’s not until we break above there that I’m comfortable buying or a longer-term. At that point, I suspect that the Euro could go to the 1.14 handle.

To the downside, the 1.11 level should be rather supportive as it has been rather reliable. However, we break down below there then we could see this pair go down to the 1.10 level where there’s even more support. A breakdown below that level would be catastrophic for the common currency.

All things being equal, I do believe that the EUR/USD pair is trying to form some type of longer-term bottom, and that’s never an easy proposition. Quite often it takes several months to happen, and with the US economy looking like it’s slowing down a bit we could see a return to higher levels eventually. That being said, in the short term I believe that trading is 100 point range is probably one of the easier traits in the Forex world, as long as you recognize it for what it truly is – a short-term traders type of market, but that isn’t necessarily unusual for this pair.

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 1.13.

The projected upper bound is: 1.12.

The projected lower bound is: 1.11.

The projected closing price is: 1.11.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 black candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 29.2607. This is not an overbought or oversold reading. The last signal was a sell 2 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 39.59. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 205 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -120.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 4 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 1 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed up 0.001 at 1.114. Volume was 95% below average (consolidating) and Bollinger Bands were 42% narrower than normal.

Open High Low Close Volume___
1.113 1.114 1.113 1.114 6,292

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 1.12 1.12 1.14
Volatility: 3 5 7
Volume: 86,050 112,767 134,400

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FOREX EUR= is currently 2.1% below its 200-period moving average and is in an downward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of EUR= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on EUR= and have had this outlook for the last 7 periods.

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