Euro: USD/EUR (EUR=X) economic surprises are in balance

Euro: USD/EUR (EUR=X) economic surprises are in balance

Euro: USD/EUR (EUR=X) economic surprises are in balance

The EUR/USD rate rose Tuesday as the Dollar wilted broadly in response to President Donald Trump’s attack on the Federal Reserve, but analysts say it could go further during coming months now that Transatlantic economic momentum is coming back into balance after months of US outperformance.

Economic surprise indices for the Euro area and US economy are converging once again, albeit because of a series of recent disappointments in US data and not upside surprises in anything emerging from Europe. While not enough to have analysts rushing out to buy the Euro just yet, it does remove some of the earlier incentive to sell it and buy the Dollar instead.

We’re now seeing the previous 1.15 support being tested from below and a rebound off this level could be viewed as confirmation of the original break, a bearish signal, which would put the focus back on 1.13 where we ran into support last week. We would also learn, in this scenario, just how serious traders are taking the prospect of intervention.

Should the pair break above 1.15, 1.1650 would be another area of interest, with price then testing the descending trend line from 14 June highs, and 55 and 89-day simple moving average combination.

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 1.17.

The projected upper bound is: 1.17.

The projected lower bound is: 1.14.

The projected closing price is: 1.16.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 93.2708. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 2 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 52.01. 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 3 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 47. This is not a topping or bottoming area. The last signal was a buy 3 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 0 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed up 0.009 at 1.157. Volume was 7% below average (neutral) and Bollinger Bands were 36% wider than normal.

Open High Low Close Volume___
1.148 1.160 1.148 1.157 133,550

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

Moving Averages: 10-period 50-period 200-period
Close: 1.15 1.16 1.20
Volatility: 11 10 9
Volume: 144,966 148,793 132,641

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 3.3% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 11 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.

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