Euro: USD/EUR (EUR=X) continues to fall

Euro: USD/EUR (EUR=X) continues to fall

Euro: USD/EUR (EUR=X) continues to fall

The Euro has broken down significantly during the week, slicing through the 1.09 level, an area that should have held significantly. That being said though, with the ECB looking to do more buybacks when it comes to bonds, it makes sense that the Euro continues to fall against what is without a doubt the strongest major currency in the world right now, the US dollar. Bond yields in the European Union continue to drift into negative yield territory, and that of course works against the value of the currency itself.

Looking at this chart, you can also extrapolate the fact that the US bond markets offer a yield as yet another reason for the US dollar to continue strengthening as foreign buyers of US treasuries continue to accelerate. In a world where there is almost no yield, traders are going to be chasing that yield with abundance. Beyond that, the US dollar is a bit of a safety currency anyway, so that’s a bit of a “one-two punch” for this pair. With the European Union slipping towards recession in the future, and the United States still showing strength, this move makes complete sense.

To the downside, there is a gap at the 1.0750 level that should be interesting and should attract a lot of attention. I think at this point it’s very likely that we will go looking to fill that area. If we do break through it, that opens up a move down to the 1.06 level, and then possibly even the 1.05 level. To the upside, we would need to close above the 1.10 level on at least a daily chart to consider buying.

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

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 2 white candles and 8 black candles for a net of 6 black candles. During the past 50 bars, there have been 23 white candles and 26 black candles for a net of 3 black candles.

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 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 6.1695. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 12 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 23.70. 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 119 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 -117.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 12 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 28 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed up 0.000 at 1.083. Volume was 99% below average (consolidating) and Bollinger Bands were 73% wider than normal.

Open     High      Low     Close     Volume___
1.083 1.084 1.082 1.083 753
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.09 1.11 1.11
Volatility: 3 5 5
Volume: 65,309 59,072 72,677

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 2.5% 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 21 periods. Our momentum oscillator is currently indicating that EUR= is currently in an oversold condition.

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