The US Dollar was bearish against most of its major pairs on Wednesday with the exception of the CHF and EUR. On the US economic data front, the Mortgage Bankers Association’s Mortgage Applications declined 2.5% for the week ending September 11th, compared to +2.9% in the prior week. Retail Sales Advance rose 0.6% on month in August (+1.0% expected), compared to a revised +0.9% in July. Finally, the Federal Reserve decided to keep the Federal Funds Rate at 0.00% to 0.25%, as expected.
On Thursday, Housing Starts for August are expected to slip to 1,483K on month, from 1,496K in July. Initial Jobless Claims for the week ending September 12th are expected to decline to 850K, from 884K in the week before. Finally, Continuing Claims for the week ending September 5th are expected to fall to 13,000K, from 13,385K in the previous week.
The Euro was under pressure against all of its major pairs dropping 47 pips to 1.18 against the USD. In Europe, the European Commission has posted July trade balance at 20.3 billion euros surplus (vs 19.3 billion euros surplus expected). The U.K. Office for National Statistics has released August CPI at -0.4% on month (vs -0.6% expected). PPI were released at +0.0%, vs +0.2% expected. Moreover, OECD raised its 2020 Global economy forecast to -4.5% (vs -6.0% previously). U.S. GDP is expected at -3.8% (vs -7.3% previously) and Eurozone GDP is raised by 1.2% point to -7.9% (vs -9.1% previously).
Looking at the EUR/USD chart, the pair remains in a consolidation between 1.2015 and 1.1695. The preference is for a breakout above 1.2015 resistance to continue the prior uptrend however a break below 1.1695 could pressure the pair below its 50-day moving average down towards 1.15.
Euro/US Dollar Exchange Rate
Today’s Forex Rates
Overall, the bias in prices is: Upwards.
The projected upper bound is: 1.19.
The projected lower bound is: 1.16.
The projected closing price is: 1.18.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 31 white candles and 19 black candles for a net of 12 white candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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 31.3044. This is not an overbought or oversold reading. The last signal was a buy 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 44.61. 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 21 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 -144.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 6 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 sell 28 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed down -0.006 at 1.176. Volume was 81% below average (consolidating) and Bollinger Bands were 53% narrower than normal.
Open High Low Close Volume 1.181 1.182 1.173 1.176 20,534
Technical Outlook Short Term: Neutral Intermediate Term: Bearish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 1.18 1.17 1.12 Volatility: 5 7 9 Volume: 83,144 97,292 98,212
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 4.8% above its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future.
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 10 periods.
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