Euro: USD/EUR (EUR=X) Bullish On The Euro
Euro weakness has it backing down amidst the chop again that’s mired its outlook since late October. With a little more weakness support will come into play via a trend-line from the November low. The trend-line makes up the lower parallel of a developing bear-flag.
Within the context of the one-year downtrend a breakdown below the lower threshold of the pattern should once again have EUR/USD firmly rolling downhill. For full confirmation, it may prove prudent to first wait for a break below the Jan 3 low at 11306. Support is support until it’s not.
It would be unsurprising given the current low-volatility environment to see a bounce develop as price swings in both directions have been short-lived. There is still plenty of risk that the bear-flag takes a while longer to fully mature. With that in mind, the tactical approach for the next week consists of more of the same cautiousness.
Looking for a bounce off the bottom-side of the bear-flag may prove fruitful for a quick flip if momentum turns up on the sub-daily time-frames (i.e. 4-hr), while a rally to the top-end of the pattern could present a decent risk/reward opportunity to establish a short.
If the 11306 level is broken, then leaning towards bearish momentum and/or pullback strategies may become an approach worth considering.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 1.15.
The projected upper bound is: 1.15.
The projected lower bound is: 1.12.
The projected closing price is: 1.14.
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.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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 13.8464. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 7 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 46.09. 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 112 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 -72. This is not a topping or bottoming area. The last signal was a sell 6 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 3 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed up 0.001 at 1.137. Volume was 98% below average (consolidating) and Bollinger Bands were 13% narrower than normal.
Open High Low Close Volume___
1.137 1.141 1.136 1.137 2,850
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.14 1.14 1.16
Volatility: 7 8 8
Volume: 138,658 140,926 140,666
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 upward trend. Volatility is high 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 32 periods.
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