Battle Between Dollar Bulls and Euro: USD/EUR (EUR=X) Bears
The price action last week suggests investors are being a little tentative about buying strength. In three sessions out of five, the dollar index rallied to highs not touched since early December before closing lower. On Friday, the dollar index reached its highest level since April 21, 2017 before posting a dramatic technical closing price reversal top.
This type of price action strongly suggests there is a battle going on between strong buyers responding to the dollar’s safe-haven appeal and the strength of the U.S. economy relative to the other major economies, and strong sellers who are trying to prevent a surge to the upside which could wreak havoc with the global economy, especially in the emerging markets.
Friday’s price action also suggests that the U.S. Dollar may have hit a critical area on the charts. One that have ramifications across the board in the global equity and gold markets. If sellers can take control then the dollar index should feel enough pressure to support higher stock and gold prices. However, if the dollar index continues to rally then equity and gold traders will have to face the possibility of dramatic sell-offs.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 1.14.
The projected upper bound is: 1.14.
The projected lower bound is: 1.12.
The projected closing price is: 1.13.
During the past 10 bars, there have been 2 white candles and 7 black candles for a net of 5 black candles. During the past 50 bars, there have been 23 white candles and 26 black candles for a net of 3 black candles.
A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 37.3528. This is not an overbought or oversold reading. The last signal was a buy 1 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 41.66. 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 131 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 -92. This is not a topping or bottoming area. The last signal was a buy 0 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 7 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed down -0.001 at 1.129. Volume was 6% above average (neutral) and Bollinger Bands were 12% wider than normal.
Open High Low Close Volume___
1.129 1.131 1.123 1.129 152,827
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.13 1.14 1.15
Volatility: 6 8 8
Volume: 150,258 145,512 144,923
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.
FOREX EUR= is currently 2.0% 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 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.