Euro: USD/EUR (EUR=X) Data Refreshes Economic Growth Concerns
PMI data out of Europe this week served as a reminder of slowing economic growth and set low expectations for the quarter.
Manufacturing data that was released yesterday continued to show a contraction in most European countries. Services data, which were released today, provided little encouragement.
Services have typically outperformed manufacturing so it was not a big surprise that all the countries reporting today held in expansionary territory. Although Italy is quite close to showing a contraction with a print of 50.4 in November, falling short of the estimate of 51.2
IHS Markit reported that today’s data signals 0.1% GDP growth in the last quarter of the year, with manufacturing creating a notable drag. While today’s figures steadied a bit from the last reading, the numbers are at the lower end of what’s been reported over the last five years.
This should keep pressure on inflation which will make the ECB’s task of price stability harder, despite all of its efforts.
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.
A black body occurred (because prices closed lower 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 29 white candles and 21 black candles for a net of 8 white 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).
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 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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 82.5000. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 3 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 55.28. 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 66 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 102.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 14 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 1 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed down -0.001 at 1.108. Volume was 15% below average (neutral) and Bollinger Bands were 44% narrower than normal.
Open High Low Close Volume___
1.108 1.112 1.107 1.108 64,674
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.10 1.10 1.12
Volatility: 4 4 6
Volume: 62,743 69,833 90,871
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.
FOREX EUR= is currently 0.8% 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 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 15 periods.