Euro: USD/EUR (EUR=X) data may prove supportive but worries remain over the strength of the Euro-Zone economy

Euro: USD/EUR (EUR=X) data may prove supportive but worries remain over the strength of the Euro-Zone economy

Euro: USD/EUR (EUR=X) data may prove supportive but worries remain over the strength of the Euro-Zone economy

The single-currency is gaining strength going into the weekend, aided in part by weakness in the US dollar, and will wait until data releases mid-week until it confirms whether this trend has further to go. The most important releases of the week are on Thursday with the first look at German and Euro-Zone PMIs.

The recent data has been weak with German manufacturing in particular at a 2012 low as factory activity contracts further. A rebound of these levels may add support to the recent tick higher in the Euro although it is unlikely to fuel a further advance. This week’s ECB monetary policy meeting was rather muted affair and offered the market very little in the way of any fresh guidance or opinion.

While the currency may be seeing gains, the outlook for the EZ economy remains weak. Recent ‘sources’ reports suggest that the ECB may be willing to offer the upcoming 2-year TLTROs with negative rates, while German 2019 GDP may well be downgraded again to 0.5% from a current level of 1%.

Factor in that Italian GDP for this year is now expected to be around 0.2% and the problems for growth in the single-block remain entrenched. In addition, US-EU trade tensions re-emerged this week after US President Trump threatened an additional $11.2 billion of tariffs on EU goods as part of a dispute over EU subsidies to European airline giant Airbus. The EU said that they would look at imposing tariffs on US airline manufacturer Boeing in retaliation. A fresh trade dispute with the US, coming at a time when Brexit is far from settled, may well weigh further on economic growth in the Euro-Zone.

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 1.13.

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 5 white candles and 5 black candles. During the past 50 bars, there have been 22 white candles and 26 black candles for a net of 4 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 70.3072. This is not an overbought or oversold reading. The last signal was a buy 8 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 54.19. 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 172 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 151.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 8 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 4 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed up 0.000 at 1.130. Volume was 100% below average (consolidating) and Bollinger Bands were 13% wider than normal.

Open High Low Close Volume___
1.130 1.130 1.129 1.130 399

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

Moving Averages: 10-period 50-period 200-period
Close: 1.13 1.13 1.14
Volatility: 4 6 8
Volume: 116,421 138,592 140,669

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 1.2% 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 moderate flows of volume out of EUR= (mildly bearish). Our trend forecasting oscillators are currently bearish on EUR= and have had this outlook for the last 11 periods.

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