The Euro US Dollar (EUR/USD) exchange rate is advancing on Wednesday for the third straight session. The pair settled 0.1% higher in the previous session at $1.2151, 15 pips off the high of the day. At 07:15 UTC, EUR/USD trades +0.4% at US$1.2206 a fresh year to date high.
Despite rising covid cases and tighter lockdown restrictions in several Eurozone countries such as Germany and the Netherlands, the Euro is managing to push higher. With several covid vaccines expected to be approved in the coming weeks, investors have are shrugging off near term covid fears.
December’s preliminary PMI data for the region is due to be released. Analysts are expecting the manufacturing sector to show resilience despite the lockdown. However, the service sector is expected to remain deep in contraction, the sector most affected by social distancing and lockdown restrictions.
The US Dollar was under pressure in the previous session and continues to weaken as vaccine optimism and additional stimulus hopes overshadowed soaring covid infections and tighter lockdown restrictions.
Investors are growing increasingly confident that Democrats and Republican lawmakers will reach an agreement over a $748 billion bipartisan proposal. Whilst this is smaller than the initial $1 trillion proposals from several months ago, it would be a direct injection of cash into the economy which is desperately needed right now. Previously agreed benefits are due to expire at the end of the year.
On the data front US industrial production rose 0.4% in November month on month, ahead of 0.3% forecast but down from October’s 0.9% as the sector remains resilient despite resurging covid.
Today investors will be looking out for further developments in stimulus talks and at the Fed interest rate decision. The Fed are not expected to ease monetary policy instead are likely to sit on the sideline waiting for further developments surrounding the covid vaccine rollout and stimulus news.
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 1.19.
The projected upper bound is: 1.23.
The projected lower bound is: 1.21.
The projected closing price is: 1.22.
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 28 white candles and 22 black candles for a net of 6 white candles.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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 88.2837. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 8 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 73.05. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. 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.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 29 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed up 0.001 at 1.221. Volume was 84% below average (consolidating) and Bollinger Bands were 71% wider than normal.
Open High Low Close Volume 1.220 1.221 1.219 1.221 17,209
Technical Outlook Short Term: Overbought Intermediate Term: Bullish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 1.21 1.19 1.15 Volatility: 4 7 9 Volume: 110,085 106,837 110,473
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 6.4% 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 29 periods. Our momentum oscillator is currently indicating that EUR= is currently in an overbought condition. 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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