Euro: USD/EUR (EUR=X) Explodes To The Upside

Euro: USD/EUR (EUR=X) Explodes To The Upside

Euro: USD/EUR (EUR=X) Explodes To The Upside

The Euro has gapped higher to kick off the trading week, reaching towards the 1.15 level, as the US dollar is getting hit due to the fact that the Federal Reserve is one of the few places that can cut its interest rates with any type of significance. With that being the case, the US dollar is taking it on the chin due to that. Furthermore, once they do make another couple of cuts, it’s very likely that you may see the markets turn right back around. In the short term though, it’s clear that the Euro has been a major beneficiary as they cannot cut rates. Think of it this way: markets had been priced for the ECB to not cut rates, while the Federal Reserve wasn’t supposed to either. So while this is looking very much like everybody is running towards the Euro, it’s more or less repricing the US dollar.

The 1.15 level is formidable of course, but if we break above there it’s likely that we will get more of a “blow off top”, which could send this market to much higher levels, before rolling right back over. That being said, you certainly can’t short the Euro right now, as it is starting to see far too much in the way of strength from a short-term perspective. With that, I would also be cautious about trying to get too cute with the markets, as this is starting to look a lot like the type of volatility that we had seen back in 2008.

Technical Indicators

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

The projected upper bound is: 1.16.

The projected lower bound is: 1.13.

The projected closing price is: 1.15.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 1 black candles for a net of 7 white candles. During the past 50 bars, there have been 24 white candles and 25 black candles for a net of 1 black 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 86.2728. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 12 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 80.80. 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 4 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 138.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 13 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 10 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed up 0.000 at 1.145. Volume was 98% below average (consolidating) and Bollinger Bands were 268% wider than normal.

Open     High      Low     Close     Volume___
1.145 1.146 1.142 1.145 1,034
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1.12 1.10 1.11
Volatility: 10 8 6
Volume: 97,767 72,668 72,450

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 3.1% above its 200-period moving average and is in an upward 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 moderate flows of volume into EUR= (mildly bullish). Our trend forecasting oscillators are currently bullish on EUR= and have had this outlook for the last 6 periods. Our momentum oscillator is currently indicating that EUR= is currently in an overbought condition.

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