Euro: USD/EUR (EUR=X) Expect Some Profit Taking
There were limited moves on FX markets yesterday despite a positive risk scene. Sterling softened slightly but there was no standout reason for this and its main pairs remained well within their recent trading ranges. In level terms, this is often mirrored in EUR/GBP opening this morning close to the 89.5p mark. At the same time, GBP/USD is in the lower half of the $1.25-1.26 range. Meanwhile, EUR/USD has up to now held above the $1.12 level.
Elsewhere, equities made some additional gains yesterday. Investors remain optimistic about the likelihood of a vigorous recovery in activity as economies emerge from lockdown. The main European indices gained 2.5-3.5%, whereas the S&P 500 was up 1.4%. the improvement in sentiment additionally saw bond yields move higher.
Yesterday’s United States ADP report for May, which showed a 2.8m fall in private payrolls (forecast –9m), helped aid this optimism. The data, which align with the continuing jobless claims figures, suggest Friday’s payroll report could also be significantly higher than expected.
Today, a key focus for markets will be the ECB’s June policy meeting. No change to the depo rate is expected given that at its last two meetings the central bank has lowered the rate on TLTROs. However, the market will expect a sizeable expansion in the ECB’s €750bn PEPP asset purchase program. Updated macro projections that account for the Covid crisis will be released.
A potential increase in the bank’s QE programme has been well signalled in advance by Governing Council members. However, today’s meeting will still pose some downside risk to both the euro and Eurozone periphery debt if the ECB disappoints.
Elsewhere, there’s very little out to impact either the greenback or sterling.
Euro/US Dollar Exchange Rate
Euro/Sterling Exchange Rate
Sterling/US Dollar Exchange Rate
Today’s Forex Rates
Euro/US Dollar FX Polls
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 1.10.
The projected upper bound is: 1.15.
The projected lower bound is: 1.12.
The projected closing price is: 1.13.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 9 white candles and 1 black candles for a net of 8 white candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 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 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 91.2833. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 11 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 77.59. This is where it usually tops. 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 sell 63 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 148.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 10 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 14 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed up 0.000 at 1.134. Volume was 78% below average (consolidating) and Bollinger Bands were 48% wider than normal.
Open High Low Close Volume 1.134 1.134 1.132 1.134 24,038
Technical Outlook Short Term: Overbought Intermediate Term: Bullish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 1.11 1.09 1.10 Volatility: 6 9 9 Volume: 104,751 111,485 85,236
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 2.9% above its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods.
Our volume indicators reflect very strong flows of volume into EUR= (bullish). Our trend forecasting oscillators are currently bullish on EUR= and have had this outlook for the last 11 periods. Our momentum oscillator is currently indicating that EUR= is currently in an overbought condition.
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