Euro: USD/EUR (EUR=X) Bounce looks likely, a break would be reason to turn more aggressively short
Last week, the Euro furthered weakness off confluent trend-line resistance. The move from resistance already has big support in view as the trading range remains quite narrow in historical terms. Only a small handful of times has the 6-month range ever been this tight.
In the current environment fade trades off significant levels have been the only tactical approach working. Next week may bring another such opportunity if either the lower parallel holds or price maintains the zone from around 11320 down to 11268, with price support the most meaningful.
The 11300-level became important back in August, with the area just surrounding it having become an inflection point of support on numerous occasions since late October. The more times a level or price zone is tested the more meaningful it becomes.
While the immediate environment indicates the best approach is to fade key levels, at some point we are very likely to see EUR/USD make quite a large move. Price action is getting about as pent up as it has been at anytime since the Euro’s existence. A strong close below 11268 doesn’t of course guarantee that we see a big surge in momentum, but given the trend, importance of support, and volatility conditions it may indeed be get us much closer to the tipping point…
Overall, the bias in prices is: Downwards.
The projected upper bound is: 1.15.
The projected lower bound is: 1.12.
The projected closing price is: 1.13.
A black body occurred (because prices closed lower 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 25 white candles and 25 black 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 6.9766. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 5 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 41.27. 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 126 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 -104.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 4 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 2 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed down -0.001 at 1.133. Volume was 7% above average (neutral) and Bollinger Bands were 20% narrower than normal.
Open High Low Close Volume___
1.134 1.135 1.132 1.133 154,670
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.14 1.14 1.15
Volatility: 5 8 8
Volume: 164,054 146,227 144,184
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 1.9% below 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 2 periods.
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