Euro: USD/EUR (EUR=X) Dips Below 1.1200 Handle
After consolidating within a range for just over a week, EUR/USD is under pressure in early trading on Tuesday, and has fallen below the 1.1200 handle. The pair appears to be targeting stops set below the mid-June low.
In the middle of June, the pair was supported by a horizontal level at 1.1184 that had held it higher in March and in April. From the level, the pair rallied more than 200 pips in the second half of June, as market participants digested a dovish shift in US monetary policy.
Recall that the pair made lows in the middle of June just after a speech from ECB President Draghi that was much more dovish when compared to the earlier ECB meeting.
This week, the ECB will meet again, expectations are building that they will be significantly more dovish than last month. I expect the meeting will trigger a lot of volatility. Ahead of it, I’m wary of any fake breakouts, hence the current decline in EUR/USD may not necessarily signal a breakdown.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 1.13.
The projected lower bound is: 1.10.
The projected closing price is: 1.11.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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 12.0915. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 9 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 37.43. 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 243 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 -196.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 9 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 sell 15 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed down -0.006 at 1.115. Volume was 24% below average (neutral) and Bollinger Bands were 12% wider than normal.
Open High Low Close Volume___
1.121 1.121 1.114 1.115 75,053
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.12 1.12 1.13
Volatility: 6 6 7
Volume: 76,188 80,995 124,042
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 1.4% below its 200-period moving average and is in an downward trend. Volatility is low 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 10 periods.