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Euro: USD/EUR (EUR=X) Extends Bull Run Ahead of the ECB Rate Decision

Euro: USD/EUR (EUR=X) Extends Bull Run Ahead of the ECB Rate Decision

Safe haven currencies were on the back foot yesterday, with both the dollar and also the yen coming under some downward pressure, as risk appetite continued to improve.

Ongoing optimism amongst market traders surrounding the re-opening of economies was the main driver of this action.

A strong Chinese services PMI for May was released overnight and seemingly acted as a support in this regard.

In level terms, the softer tone to both the dollar and the yen sees EUR/USD open this morning at the $1.12 threshold, whereas EUR/JPY has moved into the upper half of the ¥121-122 range. At the same time, cable (GBP/USD) is operating just under $1.26. Meanwhile, EUR/GBP is changing hands down near to the 89p threshold.

Elsewhere on money markets, the improvement in sentiment was mirrored in European equities creating some smart gains.

The Euro Stoxx 50 finished the session up 2.6%, whereas the FTSE 100 moved 0.9% higher. In the US, the S&P 500 rose by 0.8%, while the Nikkei
hit a three and a half month high in overnight trading.

Today, the highlight of the schedule is the non-manufacturing ISM for May in the United States. The index is forecast to have picked up from 41.8 to 44.0. While such a reading would offer additional proof of nascent economic recovery, dollar reaction to the release could also be minimal.

Similarly, April unemployment figures in the Eurozone are unlikely to be a mover for the euro.

Instead, moves within the main pairs, if any, are likely to be driven by shifts in sentiment. Headlines concerning protests in the United States, US China trade tensions and Brexit will bear close observation as a result.

In the face of those headwinds, it will be interesting to see if markets will stay in risk-on mode today.

Euro/US Dollar Exchange Rate

Euro/Sterling Exchange Rate

Sterling/US Dollar Exchange Rate

Today’s Forex Rates

Euro/US Dollar FX Polls

Economic Events

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 1.10.

The projected upper bound is: 1.14.

The projected lower bound is: 1.11.

The projected closing price is: 1.12.

Candlesticks

A black body occurred (because prices closed lower 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 25 white candles and 25 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 87.3083. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 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 71.08. 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 62 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 126.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 9 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 13 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed down -0.002 at 1.122. Volume was 76% below average (consolidating) and Bollinger Bands were 24% wider than normal.

Open    High     Low      Close      Volume
1.123   1.124    1.121    1.122      26,288
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:      7             9              9
Volume:          104,480       111,793        85,047

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 1.8% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future.

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 10 periods. Our momentum oscillator is currently indicating that EUR= is currently in an overbought condition.

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