Euro: USD/EUR (EUR=X) Clings to 1.08 Level

Euro: USD/EUR (EUR=X) Clings to 1.08 Level

Euro: USD/EUR (EUR=X) Clings to 1.08 Level

The downside momentum in EUR/USD has subsided somewhat and the pair posted a small gain yesterday after declining for the five consecutive sessions before it. Over the last thirteen sessions, the exchange has declined in 11.

While Euro weakness has subsided, the greenback has continued to march higher. The trade-weighted dollar index (DXY) has rallied in the early day to fresh highs not seen since May 2017.

Data from Europe was somewhat mixed with French CPI declining 0.4% last month while German sentiment was better than expected. Survey data revealed that consumers expect the economy to make a slow recovery, yet income expectations declined moderately.

Earlier this week, ZEW economic sentiment showed a downturn in expectations for the German economy as investors and analysts grew concerned over the economic impact of the Coronavirus.

The European Central Bank will release minutes from its latest monetary policy meeting later in the day. The impact might be limited as the view has likely changed with the Coronavirus developments that followed the meeting.

Bottom Line

  • EUR/USD has fallen into a consolidation since yesterday, however, other major currencies have shown signs of renewed weakness during the same time.
  • The ECB will release minutes from the last meeting. A low impact is expected as Coronavirus developments that followed their last meeting may have altered the outlook.

Technical Indicators

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 1.10.

The projected upper bound is: 1.09.

The projected lower bound is: 1.07.

The projected closing price is: 1.08.

Candlesticks

During the past 10 bars, there have been 3 white candles and 6 black candles for a net of 3 black candles. During the past 50 bars, there have been 22 white candles and 27 black candles for a net of 5 black 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).

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 14.8701. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 16 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 22.69. This is where it usually bottoms. 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 buy 123 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 -95. This is not a topping or bottoming area. The last signal was a buy 1 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 sell 32 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed unchanged at 1.078. Volume was 99% below average (consolidating) and Bollinger Bands were 97% wider than normal.

Open     High      Low     Close     Volume___
1.078 1.079 1.078 1.078 498
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.08 1.10 1.11
Volatility: 4 5 5
Volume: 66,258 59,540 72,116

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 2.9% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect very strong flows of volume out of EUR= (bearish). Our trend forecasting oscillators are currently bearish on EUR= and have had this outlook for the last 25 periods. Our momentum oscillator is currently indicating that EUR= is currently in an oversold condition. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.

The following two tabs change content below.
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.

Latest posts by HEFFX Australia (see all)