Euro: USD/EUR (EUR=X) A Week Filled with Risk Events

Euro: USD/EUR (EUR=X) A Week Filled with Risk Events

Euro: USD/EUR (EUR=X) A Week Filled with Risk Events

After a period of unusually low volatility, EUR/USD is starting to come alive with several risk events to provide the markets a catalyst.

Yesterday, the Federal Reserve monetary policy meeting drove EUR/USD above the 1.1100 handle for the first time since the early month.

Policymakers kept rates unchanged which was largely expected. The main message was that rates, and inflation, are likely to stay at current levels for quite some time.

Powell reiterated that the current dynamics are not what they once were when it comes to upward inflationary pressures. As a result, it doesn’t seem likely that rates will be need to be raised anytime soon. At the same time, he communicated that the economy is on pace for moderate growth and continued record unemployment which removes the need to implement further monetary policy easing.

Despite the message, the markets continue to expect another rate cut in the United States, albeit with much less confidence. The futures markets are now showing a roughly two out of three probability for one more cut by the end of 2020.

Investors will shift their attention to European monetary policy as the ECB will announce their latest rate decision and hold a press conference later today. EUR/USD is showing some upward momentum, but a more dovish than expected ECB is probably needed to continue this momentum.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 1.11.

The projected upper bound is: 1.12.

The projected lower bound is: 1.10.

The projected closing price is: 1.11.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 75.2506. This is not an overbought or oversold reading. The last signal was a sell 4 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 59.71. 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 buy 72 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 126.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 4 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 7 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed down -0.001 at 1.112. Volume was 12% below average (neutral) and Bollinger Bands were 26% narrower than normal.

Open     High      Low     Close     Volume___
1.113 1.115 1.110 1.112 63,777
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.11 1.11 1.12
Volatility: 5 4 6
Volume: 58,146 68,241 88,297

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.

Summary

FOREX EUR= is currently 0.3% below 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 1 periods.

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