The sharp and continuous EUR/USD selling since the end of last week’s trading pushed it towards the 1.1691 level, its lowest level in two months, before settling around 1.1705 at the time of writing. Gains in the US currency increased, supported by its popularity as a safe haven, coinciding with fears of the Coronavirus second wave strength within the European continent. In the event of an emergency shutdown, losses of the single European currency may increase. Despite stalled negotiations for more stimulus plans for the US economy. What supported the dollar’s gains was the optimism from both the governor of the US Federal Reserve Bank and the Secretary of the Treasury regarding the future recovery of the largest economy in the world from the devastating human and economic effects of Corona.
Powell told the House Financial Services Committee that he believes the US economy is “recovering”. Mnuchin, the Trump administration’s chief economic spokesman, said the country was in “the midst of the fastest economic recovery of any crisis in history” after the biggest economic downturn since the Great Depression of the 1930s.
On another level, preliminary data from the European Commission showed that consumer confidence in the Eurozone rose more than expected in September to its highest level in six months. Accordingly, the consumer confidence index increased to a reading of -13.9 from a reading of -14.7 in August. Economists had expected a score of -14.6. The latest reading was the highest since March when it was -11.6. According to the results, the corresponding European Union index rose to a reading of -14.9 from a reading of -15.5 in August. This was also the highest level since March, when the Coronavirus, or COVID-19, the pandemic began spreading in the region.
Final readings are due to be released along with economic sentiment data on September 29th.
On the US side, existing-home sales in the US increased to their highest level in nearly fourteen years during the month of August, according to a report issued by the National Association of Realtors. The association said existing home sales jumped 2.4 percent to an annual rate of 6.000 million in August, after jumping 24.7 percent to a rate of 5.860 million in July. The continued increase in sales matched economists’ estimates.
With the sharp increase, existing home sales reached their highest level since December 2006.
According to the technical analysis of the pair: The general EUR/USD trend has turned downward since it failed to breach the psychological resistance at 1.2000, and after the recent collapse, forex traders are wondering now about the most appropriate levels to buy. Support levels at 1.1685, 1.1600, and 1.1545 may be best suited to do so. This is because these levels will confirm that the technical indicators have reached strong oversold areas. On the upside, and as I mentioned before, bulls will still need to move towards and above the psychological resistance at 1.2000 to confirm the strength of their control over the performance.
As for the economic calendar data today: From the Eurozone, the focus will be on the announcement of the manufacturing and services sectors PMI reading. Then to the US session, and the announcement of the manufacturing and services sectors PMI reading, then to the second testimony of Federal Reserve Governor Jerome Powell.
Euro/US Dollar Exchange Rate
Today’s Forex Rates
EUR/USD FX Polls
Overall, the bias in prices is: Sideways.
The projected upper bound is: 1.18.
The projected lower bound is: 1.15.
The projected closing price is: 1.17.
A white body occurred (because prices closed higher than they opened).
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 29 white candles and 21 black candles for a net of 8 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 7.3902. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 11 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 37.31. 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 26 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 -179.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 11 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 33 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed up 0.001 at 1.167. Volume was 89% below average (consolidating) and Bollinger Bands were 23% narrower than normal.
Open High Low Close Volume 1.166 1.168 1.165 1.167 12,064
Technical Outlook Short Term: Oversold Intermediate Term: Bearish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 1.18 1.18 1.12 Volatility: 6 8 9 Volume: 96,348 98,835 99,789
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 3.9% above its 200-period moving average and is in an downward 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 bearish on EUR= and have had this outlook for the last 15 periods.
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