Buy Euro: USD/EUR (EUR=X) ahead of likely GDP surprise says Soc Gen

Buy Euro: USD/EUR (EUR=X)  ahead of likely GDP surprise says Soc Gen

Buy Euro: USD/EUR (EUR=X) ahead of likely GDP surprise says Soc Gen

The Euro is a buy ahead of the publication of first-quarter GDP data, according to analysts at Societe Generale, who’re telling clients that pessimism about the single currency outlook has gone far enough just as colleagues elsewhere in the industry are abandoning earlier bets on the Euro-to-Dollar rate. 

Eurozone GDP data for the first quarter will be released at 10:00 am London time on Tuesday and markets are looking for a poor final quarter of 2018 to be followed by a modest pickup at the beginning of the 2019 year. 

Consensus is for the Eurozone economy to have grown by 0.3% during the period, up from the 0.2% pace of growth seen in the final three months of the year. Such an outcome would place Eurozone growth on a gentle upward path from the 0.1% increase seen in the third quarter last year. 

“The PMI data did their trick and then the IFO data triggered a tumble out of the bottom of the EUR/USD range,” says Kit Juckes, chief FX strategist at Societe Generale. “Tomorrow sees the first estimate of Q1 Eurozone GDP. Our forecast of 0.5% q/q is well above a 0.3% consensus. That is enough for our first ‘go long EUR/USD’ suggestion of 2019.”

Overall, the bias in prices is: Downwards.

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

The projected upper bound is: 1.13.

The projected lower bound is: 1.11.

The projected closing price is: 1.12.

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 24 white candles and 25 black candles for a net of 1 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 25.0002. This is not an overbought or oversold reading. The last signal was a buy 0 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 40.20. 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 182 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 -102.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 7 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 4 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed up 0.002 at 1.117. Volume was 52% below average (consolidating) and Bollinger Bands were 1% narrower than normal.

Open High Low Close Volume___
1.115 1.117 1.114 1.117 65,868

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

Moving Averages: 10-period 50-period 200-period
Close: 1.12 1.13 1.14
Volatility: 6 6 8
Volume: 110,395 132,830 139,225

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 2.2% below its 200-period moving average and is in an downward trend. Volatility is 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 4 periods.

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