Brexit – Fight For Euro Clearing

Brexit – Fight For Euro Clearing

The battle to control euro clearing once the U.K. leaves the European Union is getting uglier. LCH, the London Stock Exchange Group Plc unit that dominates euro clearing, wants to stop the European Central Bank from gaining the power to veto its decisions. Eurex Clearing, the Deutsche Boerse AG-owned subsidiary that would probably benefit most if London was stripped of euro clearing

When Britain voted to leave the EU a year ago, LCH quickly became the focus of European politicians seeking to win business from a post-Brexit London with LSE Chief Executive Xavier Rolet issuing dire warnings on how jobs, banks and financial markets would suffer if the status quo changes. Eurex is now hitting back against Rolet’s more outlandish claims.

The European Commission recommended in June that clearinghouses based outside the EU but deemed systematic to European markets should face direct oversight from the club’s regulators. The commission left itself the option to strip euro clearing from London. The European Parliament and the EU’s member states will assess the proposals after the summer holiday.

Technical Analysis

Overall, the bias in prices is: Upwards.

Short term: Prices are moving.

Intermediate term: Prices are trending.

Note: this chart shows extraordinary price action to the upside.

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

The projected upper bound is: 1.19.

The projected lower bound is: 1.16.

The projected closing price is: 1.17.

Candlesticks

A black body occurred (because prices closed lower 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 27 white candles and 23 black candles for a net of 4 white 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 80.7866. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 6 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 72.35. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 3 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 124.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 18 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 9 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed down -0.002 at 1.172. Volume was 70% below average (consolidating) and Bollinger Bands were 30% wider than normal.

Open  High  Low   Close  Volume
1.173   1.178  1.171  1.172   33,093

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period   50-period   200-period
Close:                       1.16             1.13               1.09
Volatility:                8                 8                    9
Volume:                  102,538     113,381         118,117

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 7.9% above its 200-period moving average and is in an upward 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 bullish on EUR= and have had this outlook for the last 21 periods. Our momentum oscillator is currently indicating that EUR= is currently in an overbought condition.

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Ivy Heffernan

Ivy Heffernan, student of Economics at Buckingham University. Junior Analyst at HeffX and experienced marketing director.

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