Euro: USD/EUR (EUR=X) Consolidates Gains Following Dovish Powell Remarks

Euro: USD/EUR (EUR=X) Consolidates Gains Following Dovish Powell Remarks

Euro: USD/EUR (EUR=X) Consolidates Gains Following Dovish Powell Remarks

The Euro to US Dollar (EUR/USD) exchange rate remains on the front foot this morning as the ‘Greenback’ continues to grapple with renewed expectations of a rate cut from the Federal Reserve this month.

At the time of writing EUR/USD exchange rate is trading just shy of a weekly high at $1.1274.

US Dollar (USD) Nurses Losses Following Dovish Powell Comments

The US Dollar (USD) remains on the defensive against the Euro (EUR) this morning, after USD/EUR plummeted over half a cent on Wednesday.

This slump in USD came in the wake of comments made by Federal Reserve Chairman Jerome Powell in prepared remarks released yesterday ahead of his testimony in front of US Congress.

These saw Powell indicate that the Federal Open Market Committee (FOMC) will vote to cut interest rates this month in an effort to shield the US economy from the impact of trade tensions and slowing global growth.

Powell’s statement read:

‘Many FOMC participants saw that the case for a somewhat more accommodative monetary policy had strengthened. Since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook. Inflation pressures remain muted.’

This dispelled recent speculation that the continued strength of the US jobs market could result in any monetary easing by the Fed being fairly limited in scope, leading USD exchange rates to retreat as markets began to price in multiple rate cuts from the Fed this year.

Powell’s testimony will resume later today, which could inject some fresh selling impetus into the US Dollar if he maintains his cautious outlook for the US economy.

Euro (EUR) Exchange Rates Steady as Markets Await ECB Minutes

Meanwhile, the Euro (EUR) is steady this morning as investors brace for the release of the minutes from the European Central Bank’s (ECB) June policy meeting.

EUR investors are hoping the minutes will shed more light on the ECB’s plans to potentially inject fresh stimulus into the Eurozone in the near-term.

This may result in the Euro relinquishing some ground against the US Dollar (USD) if the minutes detail plans to either resume its quantitative easing programme or cut interest rates by the end of the year.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 1.14.

The projected lower bound is: 1.12.

The projected closing price is: 1.13.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 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 43.3543. This is not an overbought or oversold reading. The last signal was a buy 1 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 48.73. 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 235 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 -47. 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 7 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed up 0.001 at 1.126. Volume was 24% below average (neutral) and Bollinger Bands were 33% wider than normal.

Open High Low Close Volume___
1.125 1.128 1.124 1.126 80,083

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period     50-period     200-period
Close: 1.13 1.12 1.13
Volatility: 6 6 7
Volume: 73,209 87,261 126,129

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 0.6% 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 2 periods.

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