Euro: USD/EUR (EUR=X) Downside Pressure

Euro: USD/EUR (EUR=X) Downside Pressure

Euro: USD/EUR (EUR=X) Downside Pressure

The EUR/USD exchange rate may have found a near-term floor as a notable support level triggered a bounce yesterday to end a prior six-day bearish streak. Tuesday’s gain was a small one and further price action will reveal if the pair is setting up for a recovery after a sharp fall.

The US dollar is losing some of its upward momentum this week. Out of the major currencies, five have advanced against the greenback in the week thus far while two have declined. Currently, the single currency is the weakest of the bunch.

The New Zealand dollar rallied sharply higher against its major counterparts in the Asian session following the Reserve Bank of New Zealand’s monetary policy decision. The RBNZ kept rates unchanged and was generally upbeat with inflation hovering just below targets and the labor market near full employment. The Bank expects to keep the rate where it is and is relying on fiscal stimulus to further support the economy.

Fears over the Coronavirus appear to be easing as Reuters reported a decline in new cases. Zhong Nanshan, a lead medical advisor in China, expects the virus will peak this month and that the outbreak will be over possibly in April.

The equity markets do not appear too concerned about the Coronavirus with the S&P 500 breaking to yet another record high on Tuesday. The German DAX had lagged initially, but has followed suit and is also trading at a fresh record high in early European trading today.

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: 1.10.

The projected lower bound is: 1.08.

The projected closing price is: 1.09.

Candlesticks

During the past 10 bars, there have been 2 white candles and 7 black candles for a net of 5 black candles. During the past 50 bars, there have been 23 white candles and 25 black candles for a net of 2 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 9.7677. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 10 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 26.42. 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 117 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 -140.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 10 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 26 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed up 0.000 at 1.087. Volume was 97% below average (consolidating) and Bollinger Bands were 47% wider than normal.

Open     High      Low     Close     Volume___
1.087 1.087 1.087 1.087 1,983
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.10 1.11 1.11
Volatility: 5 5 5
Volume: 64,150 57,964 73,043

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 2.2% 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 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 19 periods. Our momentum oscillator is currently indicating that EUR= is currently in an oversold condition.

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