Euro (€) Trading & The Election

Euro (€) Trading & The Election
Euro (€) Trading & The Election

Voting is under way in the final round of France’s presidential race after a massive online dump of front runner Emmanuel Macron’s campaign data delivered a final dramatic twist to the country’s most bruising, divisive and significant election in decades.

The Brexit spotlight swung last week away from the familiar cast of bankers quitting the City and coffee-shop chains worried about recruiting staff to the fate of the energy industry tasked with powering the economy when the UK leaves the EU.

The loudest warnings came from MPs, peers, engineers and the industry itself over the impact that blocks to trade or freedom of movement would have on the nuclear and oil sectors.

However, the UK’s departure from the union also risks damaging urgent efforts to make the continent’s energy systems greener and more efficient.

Nuclear
The nuclear industry potentially stands to lose the most from leaving the EU. Buried in the small print of Theresa May’s Brexit bill in January was the news that Britain would quit a vital atomic power treaty: Eur-atom, which underpins the transport of nuclear fuel and other materials across Europe.

Oil
The big post-EU concern for the UK’s ailing oil and gas industry is the prospect of new tariffs being imposed.
Industry body Oil & Gas UK warned last week that a hard Brexit, falling back on World Trade Organization rules, would see trading costs almost double from £600m a year to £1.1bn because of changing tariff rates. At best, trading costs might go down £100m if the UK can strike more favourable deals outside the UK.
In a letter to Theresa May, the industry also stressed the international nature of its workforce, and called on the government to prioritize “frictionless access to markets and labor” during Brexit talks.

Britain has called in an international war negotiator to counter growing hostility between Brussels and London over Brexit.

Overall, the bias in prices is: Upwards.

Short term: Prices are stalling.

Intermediate term: Prices are ranging.

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

The projected upper bound is: 1.12.

The projected lower bound is: 1.09.

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 5 white candles and 5 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black candles.

A hammer occurred (a hammer has a long lower shadow and closes near the high). Hammers must appear after a significant decline or when prices are oversold to be valid. When this occurs, it usually indicates the formation of a support level and is thus considered a bullish pattern.

A hanging man occurred (a hanging man has a very long lower shadow and a small real body). This pattern can be bullish or bearish, depending on the trend. If it occurs during an uptrend (which appears to be the case with FOREX EUR=) it is called a hanging man line and signifies a reversal top. If it occurs during a downtrend it is called a bullish hammer.

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).

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 79.4940. This is not an overbought or oversold reading. The last signal was a sell 5 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 68.94. 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 7 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 105.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 5 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 13 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed up 0.001 at 1.099. Volume was 16% below average (neutral) and Bollinger Bands were 72% wider than normal.

Open    High   Low    Close    Volume
1.099    1.100  1.095   1.099   95,532

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

Moving Averages:  10-period  50-period   200-period
Close:                        1.09           1.07              1.08
Volatility:                 10              9                    9
Volume:                   104,573    107,251        110,456

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 1.5% above its 200-period moving average and is in an upward 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 bullish on EUR= and have had this outlook for the last 9 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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S. Jack Heffernan Ph.D. 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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