Euro (€) ⇨ US Dollar ($) (EURUSD) BREXIT TALKS – Donald Tusk Defending Britain

Euro (€) ⇨ US Dollar ($) (EURUSD)  BREXIT TALKS – Donald Tusk Defending Britain

Euro (€) ⇨ US Dollar ($) (EURUSD) BREXIT TALKS – Donald Tusk Defending Britain

Highlights

  • EUR/USD has charged to a six-month high, but its drive higher doesn’t seem to carry clear fundamental lines
  • Risk trends continue to inch higher with limited conviction and problem for those looking to play a trend
  • Top event risk will struggle for a volatility response and lack trend potential – UK jobs, Japan and Russia GDP, US debt
  • Donald Tusk defending Britian in Brexit Bill, saying “any plans to punish Britian through Brexit Bill will not go untreated”

Donald Tusk this morning warned fellow eurocrats that any planned attempts to punish Britain for leaving the European Union would severely damage the bloc’s reputation in the eyes of its citizens. In a forthright speech the president of the EU Council said treating the UK “fairly” during the negotiations was a top priority amid fears some in Brussels are taking a deliberately punitive stance. His warning comes after other European leaders including Commission chief Jean-Claude Juncker and Germany’s Angela Merkel branded Theresa May deluded over the cost of quitting the club.
It will be seen as a broadside against those who are looking to vastly over inflate the Brexit bill the UK will have to pay on departure whilst denying Britain its share of the bloc’s assets.  Mr Tusk made the remarks whilst sitting just yards from Mr Juncker, whose EU Commission was accused of injecting poison into the talks by leaking details of a disastrous Downing Street dinner. During his speech the Council chief said there was a unanimous agreement between Britain and the other 27 states that a free trade deal should be struck as soon as possible, but also warned it could never grant the same privileges as EU membership.
He said: “When it comes to our future the EU Council shared the UK’s desire to establish a close partnership. “It is obvious however that the relationship between the EU and a non-member state cannot offer the same benefits as EU membership. “It is clear that a free trade agreement between the EU and the UK, which is what the UK has chosen, even if it is ambitious and wide-ranging cannot mean participation in the single market or its parts. “At the same time the UK must be aware that any free trade agreement will have to ensure a level playing field and encompass safeguards against unfair competitive advantages through inter alia tax, social, environmental and regulatory measures and practices.”
Mr Tusk’s remarks on the bloc’s demands as part of a trade deal were deliberately designed to suggestions that Britain could slash corporation tax and red tape to lure business away from Europe if it is stuck with a bad Brexit deal.  The remarks, made in the immediate aftermath of the vote to leave by Mrs May, infuriated eurocrats who saw them as a blackmail note and have pointedly not since been repeated by the Prime Minister. However, alongside his warning to Britain the EU Council chief had equally stern words for any of his fellow eurocrats who feel that sticking the UK with a bad Brexit deal is the only way to ensure the future of the EU. Speaking at the EU parliament in Strasbourg he said: “Today it is too early to tell much about our common future but we will make our guidelines more precise when the time comes, namely when sufficient progress in the first phase is achieved. “Leaders responded with the urgency that the situation required –  there will be very little time to conclude withdrawal talks. Time is at the essence here and much is at stake. “Since the referendum in June last year we have been united consistent and demonstrated solidarity with one another. “What was and remains most important for me is that our conduct in these talks will show the EU at its best in terms of unity, political solidarity and fairness towards the UK.” Mr Juncker, who has made a number of highly controversial, often off-the-cuff remarks about Brexit, notably decided not to talk about the issue during today’s EU parliament sitting and instead focused on the bloc’s other challenges. The Brussels chief made a point of starting his speech in English just days after sparking fury by saying the language was “losing importance in Europe” – an assertion which was widely challenged given its prevalence in EU business. He told the chamber: “Michel Barnier and his team have been up and running across Europe to ensure that every voice is heard. “The process shows how united and prepared the EU will be, it underlines how deep our commitment to transparency already is. This negotiation is now in the hands of our capable divorce lawyers. “This negotiation is now in the hands of our capable divorce lawyers.”

Overall, the bias in prices is: Upwards.

Short term: Prices are moving.

Intermediate term: Prices are ranging.

By the way, prices are vulnerable to a correction towards 1.08.

The projected upper bound is: 1.13.

The projected lower bound is: 1.10.

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 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 25 white candles and 25 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 93.3719. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 3 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 70.68. 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 15 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 210.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 3 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 1 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed up 0.003 at 1.111. Volume was 34% below average (neutral) and Bollinger Bands were 13% wider than normal.

Open    High    Low    Close   Volume
1.108    1.112    1.108   1.111     75,041

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

Moving Averages:  10-period      50-period      200-period
Close:                        1.10                1.08                1.08
Volatility:                 10                   9                      9
Volume:                    95,789          104,677          111,548

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 2.6% above its 200-period moving average and is in an upward trend. Volatility is high 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 17 periods. Our momentum oscillator is currently indicating that EUR= is currently in an overbought condition.

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Shayne Heffernan Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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