Euro: USD/EUR (EUR=X) Extends Recovery
The Euro to US Dollar exchange rate extended its recovery as Monday’s European session progressed with the single currency last seen trading up 0.61% at $1.11742, after posting a session high just above $1.118.
Monday’s data releases out of the bloc left much to be desired – with the services PMI edging lower while the latest Sentix investor confidence index fell to -13.7 (the joint-lowest since May 2013).
From the Sentix sentiment report: “The pressure on the economic front is increasing noticeably. The current assessment and expectations are falling to their knees, and 6-month expectations for the Euro area are falling by 7 points to -20 points. This is the lowest value since August 2012!”
With data Euro-negative, gains in Fibre were seen as stemming from from US equity futures being marked 1%+ lower this morning.
The key story for currency markets on Monday however was the re-escalation of the US-China trade war. Following last week’s surprise decision from US President Trump to slap 10% tariffs on the remaining $300 billion of Chinese goods, China retaliated on Monday by fixing the Renminbi higher, allowing a breach of the key 7.0 level for the first time in over a decade, a move which is likely to preceded further escalation in the spat.
Looking ahead to Monday afternoon, the US Dollar (USD) could slip against the Euro (EUR) following the release of the US ISM PMI composite.
If July’s PMI composite does not rise as high as forecast, the ‘Greenback’ will slide.
At the end of the week, the Dollar could edge up against the single currency following the release of the US Producer Price Index (PPI).
If PPI rises higher than expected in July, USD could rise.
Meanwhile, US-China trade tensions are likely to cause movement of the pairing.
If there are further threats of China retaliating against US President Trump’s threats, the Euro US Dollar (EUR/USD) exchange rate could rise.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 1.12.
The projected upper bound is: 1.13.
The projected lower bound is: 1.11.
The projected closing price is: 1.12.
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 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 87.0907. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 6 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 53.29. 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 253 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 83. This is not a topping or bottoming area. The last signal was a buy 2 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 0 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed up 0.002 at 1.122. Volume was 96% below average (consolidating) and Bollinger Bands were 20% wider than normal.
Open High Low Close Volume___
1.120 1.122 1.120 1.122 3,959
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.11 1.12 1.13
Volatility: 7 7 7
Volume: 75,875 77,205 121,163
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 0.7% 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 20 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.