The dollar extended its modest recovery to a fourth session on Wednesday as Brexit worries and tensions over a U.S. relief bill triggered unwinding of reflation trades funded by the low-yielding U.S. currency.
Potential dollar-positive year-end pressures are also increasingly in play, while months of Brexit brinkmanship culminate toward a Dec. 31 deadline to seal a trade deal or make a hard break.
That has led to some pruning of long GBP/USD positions taken in anticipation of an agreement. Sterling’s 1.3476 session high ran into strong supply ahead of September’s prior 2020 peak at 1.3481 as traders awaited the outcome of what’s being called the last supper for Brexit talks .
EUR/USD fell to five-day lows after stocks slid. With Brexit and U.S. fiscal risks lingering, and specs still quite long EUR/USD, the burden of proof is shifting toward the bulls.
There is some overbought risk on daily and weekly charts after last week’s sharp breakout above the down trend-line from 2011 and the prior pandemic high from September that a close below the daily tenkan at 1.2042 would exacerbate.
The kijun at 1.18895 on EBS would then become pivotal on a closing basis. The EUR/USD bull market remains intact , albeit distracted.
The ECB meeting takes the spotlight on Thursday, seen increasing PEPP and perhaps other stimulus measures. U.S. CPI and jobless claims reports are also due.
Euro/US Dollar Exchange Rate
Today’s Forex Rates
EUR/USD FX Polls
Overall, the bias in prices is: Upwards.
By the way, prices are vulnerable to a correction towards 1.18.
The projected upper bound is: 1.22.
The projected lower bound is: 1.20.
The projected closing price is: 1.21.
During the past 10 bars, there have been 4 white candles and 5 black candles for a net of 1 black candles. During the past 50 bars, there have been 25 white candles and 24 black candles for a net of 1 white 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 29.2874. This is not an overbought or oversold reading. The last signal was a sell 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 66.03. 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 2 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 buy 24 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed unchanged at 1.208. Volume was 91% below average (consolidating) and Bollinger Bands were 62% wider than normal.
Open High Low Close Volume 1.208 1.208 1.207 1.208 9,555
Technical Outlook Short Term: Neutral Intermediate Term: Bullish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 1.21 1.18 1.15 Volatility: 8 7 9 Volume: 104,037 107,445 111,095
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 5.5% 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 24 periods.
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