Euro: USD/EUR (EUR=X) Choppy As Recession Indicators Flash Red

Euro: USD/EUR (EUR=X) Choppy As Recession Indicators Flash Red

Euro: USD/EUR (EUR=X) Choppy As Recession Indicators Flash Red

The Euro to US Dollar (EUR/USD) exchange rate has had a turbulent few sessions to say the least with price action – albeit confined to a $1.116 to $1.124 range – choppy over the last week amid mixed economic signals from both the US and Eurozone and ricocheting global sentiment.

After plunging on Tuesday in the wake of the US administration’s decision to delay (some) of the expected tariffs on Chinese goods from September to December, EUR/USD extended losses in early trade on the back of the latest German (Q2) GDP growth data which indicated the common currency bloc’s largest economic contributor had contracted (by 0.1%) in the three months to June.

On the trade front, whilst markets breathed a sigh of relief on Tuesday in the wake of the US administration’s delay to anticipated tariffs on some Chinese goods – originally due to come into effect on September 1st (now delayed until December) – the outlook remains bleak with a number of Wall Street analysts not anticipating a resolution to the trade turned currency war until well into next year – boding poorly for interim global demand.

Despite atrocious data out of the Eurozone, Fibre edged off of the session low following the German print with the Dollar coming under increasing pressure amid surging fears of a US recession.

Driving the elevated concerns was the inversion of the US Yield curve ( the interest rate on 10-year American government debt has now fallen below the rate on the 2-year equivalent), an historic (albeit not 100% accurate) indicator of an impending US recession.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 1.12.

The projected lower bound is: 1.10.

The projected closing price is: 1.11.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 4 black candles for a net of 1 white candles. During the past 50 bars, there have been 24 white candles and 25 black candles for a net of 1 black 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 9.5070. 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 43.11. 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 260 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 -34. This is not a topping or bottoming area. The last signal was a buy 9 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 unchanged at 1.114. Volume was 99% below average (consolidating) and Bollinger Bands were 17% narrower than normal.

Open     High      Low     Close     Volume___
1.114 1.114 1.113 1.114 833
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.12 1.12 1.13
Volatility: 6 6 7
Volume: 85,766 76,205 119,362

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 1.3% below its 200-period moving average and is in an downward 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 bearish on EUR= and have had this outlook for the last 27 periods.

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