Euro: USD/EUR Shifts Focus to Chair Powell’s recent appearances
After Monday’s robust improvement in market sentiment, there was an additional cautious tone to proceedings yesterday. This was evident in most of the major equity indices finishing the day with some modest losses. On the currency front, major pairs are confined to fairly tight ranges over the past twenty four hours.
One reason for the muted market action was ordinarily quiet and unexciting macro daily evidently, Fed Chair Powell’s Senate testimony was a non-event for the greenback. He reemphasized that the central bank stands all set to do more, but that he doesn’t consider negative rates as an appropriate policy tool. Data wise, the German ZEW sentiment index for May improved by a greater magnitude than forecast, suggesting German analysts believe the worst of the slump has passed. This morning, United Kingdom CPI data showed that headline inflation decelerated to merely 0.8% in April as oil prices weakened. Overall though, neither release has had any material impact on their several currencies.
As European forex trading gets started this morning, compared to yesterday’s open, the only change to note may be a slightly softer tone to the greenback. This is often reflected in EUR/USD consolidating its position above the $1.09 level and GBP/USD edging up towards the midpoint of the $1.22-1.23 trading band. Meanwhile, EUR/GBP continues to vary hands inside the lower half of 89-90p.
Today, there’s a scarce look to the data schedule. The minutes from the Fed’s April meeting are due (after the close in Europe) however they have been overtaken by Chair Powell’s recent appearances. Elsewhere, BoE Governor Bailey is due to speak. This poses some event risk for sterling given MPC speakers are less categorical concerning ruling out negative rates in recent comments.
Euro/US Dollar Exchange Rate
Euro/Sterling Exchange Rate
Sterling/US Dollar Exchange Rate
Today’s Forex Rates
Euro FX Polls
Economic Events
Shayne Heffernan Trade Idea
“At spot reference: 1.0945 levels (while articulating), we might see some current rallies for today that appear momentary, considering above technical rationale, one could execute an options strategy. Such options with upper strikes at 1.0976 and lower strikes at 1.0860 levels may fetch exponential yields.
Alternatively, our opinion would be to suggested shorts in EURUSD futures of May’20 delivery for the key downtrend ahead of Eurozone PMI data announcement that’s scheduled at 4.00 am ET, Eurozone composite PMI data is due. The index is expected to advance to 25.0 in May from 13.6 in April., we tend to currently want to uphold these positions on hedging sentiments.” Shayne Heffernan PhD in Economics
Technical Indicators
Overall, the bias in prices is: Sideways.
The projected upper bound is: 1.12.
The projected lower bound is: 1.07.
The projected closing price is: 1.10.
Candlesticks
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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 84.2578. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 8 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 57.68. 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 sell 51 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 111.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 11 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 buy 2 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed up 0.004 at 1.096. Volume was 32% below average (neutral) and Bollinger Bands were 44% narrower than normal.
Open High Low Close Volume 1.093 1.096 1.092 1.096 69,733
Technical Outlook Short Term: Neutral Intermediate Term: Bearish Long Term: Bearish
Moving Averages: 10-period 50-period 200-period Close: 1.09 1.09 1.10 Volatility: 6 13 9 Volume: 104,245 119,376 83,638
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 0.5% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods.
Our volume indicators reflect moderate flows of volume into EUR= (mildly bullish). Our trend forecasting oscillators are currently bearish on EUR= and have had this outlook for the last 4 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.
We invite you to try out any MetaStock product (including Add-Ons) for 30 days. If you are not convinced that it helps you make more accurate, educated trading decisions, just return it to us within the 30 days for a refund of the purchase price. It’s that simple. This policy does not apply to subscriptions.