The Euro-to-Dollar exchange rate confirmed the end of its eight-week winning streak on Friday after IHS Markit PMI surveys surprised on the downside and in the process, helped condemn the single currency to a correction from two-year highs, which is expected to play out amid a rebound for the greenback.
Europe’s single currency ceded ground to most major rivals last week including the Dollar, bringing an end to a two-month run of unbroken gains while potentially putting at risk the multi-month uptrend in the Euro-to-Dollar rate.
Friday saw French and Eurozone PMI surveys slump in a market disappointment that proved pivotal to the trajectory of the major exchange rates ahead of the weekend, while weakness in the German services sector added to the glum mood that sent EUR/USD lower and the Dollar Index higher.
A quiet economic calendar this week could mean the gloom kicked up by this data hangs in the air in the days ahead, enabling an oversold greenback to carve out a short-term bottom in the wake of two months of losses.
Further weakness may test the nerve of a record ‘net long’ position among speculative investors, which has built steadily over recent months but with a marked step up in appetite for the single currency since late July.
The unprecedented amounts of new money created to fund extraordinary policy supports for the economy could forever have changed the way the Fed combats crises and in a manner that sees future balance sheet expansions working their way more effectively and directly into the real economy.
From corporate bond purchases to government bond buys that are closely coordinated with Treasury fiscal plans, the Fed’s new policy bag is a Dollar bearish one and should Powell delve into this subject on Thursday then he might ensure a soft finish to the week for the greenback
The same is true of other central banks including the Bank of England (BoE), which has despatched Governor Andrew Bailey to Jackson Hole where he’ll address an audience around 14:05 Friday. Sterling will be listening keenly for clues about how the BoE’s policy stance could change in the months ahead.
Euro/US Dollar Exchange Rate
Today’s Forex Rates
Euro/US Dollar FX Polls
Overall, the bias in prices is: Upwards.
The projected upper bound is: 1.19.
The projected lower bound is: 1.17.
The projected closing price is: 1.18.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 31 white candles and 18 black candles for a net of 13 white candles.
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 27.1382. 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 56.83. 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 3 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 -51. This is not a topping or bottoming area. The last signal was a sell 3 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 10 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed up 0.000 at 1.180. Volume was 95% below average (consolidating) and Bollinger Bands were 45% narrower than normal.
Open High Low Close Volume 1.179 1.181 1.179 1.180 5,072
Technical Outlook Short Term: Neutral Intermediate Term: Bullish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 1.18 1.15 1.11 Volatility: 7 8 9 Volume: 87,431 105,390 95,167
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 5.8% 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 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 28 periods.
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