Euro: USD/EUR (EUR=X) Finds Support in Mixed Eurozone Wage Data

Euro: USD/EUR (EUR=X) Finds Support in Mixed Eurozone Wage Data

Euro: USD/EUR (EUR=X) Finds Support in Mixed Eurozone Wage Data

Investors bought the Euro to US Dollar (EUR/USD) exchange rate back up from the lows it saw over the weekend today, as markets reacted to some disappointing US data. The pair’s potential for gains was limited though, amid Eurozone inflation concerns and anticipation for upcoming Federal Reserve news. 

Eurozone economic concerns and some strong US data saw EUR/USD tumble from 1.1340 to around 1.1230 last week, and the pair touched on a fresh fortnight low of 1.1180 when markets opened this morning. At the time of writing through, EUR/USD trended closer to the level of 1.1240. 

EUR Exchange Rates Find Support in Mixed Eurozone Wage Data

Last week saw a limp performance in the Euro, amid a lack of strong Eurozone data combined with Eurozone political uncertainties and a brief boost in demand for the Euro’s rival, the US Dollar (USD). 

Eurozone data has continued to paint a mixed picture for the bloc’s economic outlook, which has made investors anxious that the European Central Bank (ECB) could be pressures into taking a more dovish stance on Eurozone monetary policy. 

In fact, ECB Board Member Benoit Coeure said in an interview that if necessary the bank would cut rates further or introduce more quantitative easing (QE). He said: 

‘The question is not whether we have instruments; we do have instruments. We can change our guidance. We can cut rates. We can restart QE,’

However, despite these comments as well as concerns about Eurozone inflation, ECB Vice President Luis de Guindos said over the weekend that long-term inflation expectations had not yet gotten bad enough for the ECB to consider more stimulus. 

This morning’s Eurozone data, combined with the day’s fresh US Dollar weakness, helped the Euro to perform a little more resiliently. Eurozone wage growth rose in Q1, which pleased markets. 

USD Exchange Rates Slide as Empire’s Manufacturing PMI Prints Surprise Contraction

After slumping at the beginning of the month on fresh bets that the Federal Reserve will cut US interest rates over the next year, the US Dollar found a little relief towards the end of last week’s trade session. 

As US retail data and production stats came in stronger than expected in some prints, investors revised Fed interest rate cut bets and the US Dollar rebounded from its lows. 

Some analysts argued that Fed interest rate cut bets had been overdone, so bets continued to ease slightly when markets opened today. 

Still, as the possible dovishness of the Federal Reserve continues to dominate the US Dollar’s movement, the US currency was a little weaker today in reaction to the latest US manufacturing data. 

Empire’s June manufacturing PMI was expected to have slowed from 17.8 to 10, but the figure instead unexpectedly slumped to a contraction of -8.60. 

On top of this, NAHB’s US housing market index from June unexpectedly slowed to 64, rather than climbing to 67 as forecast. 

These stats weighed on the US Dollar’s strength, but investors are still hesitant to move too much on the US currency ahead of Wednesday’s Federal Reserve news. 

Overall, the bias in prices is: Sideways.

The projected upper bound is: 1.13.

The projected lower bound is: 1.11.

The projected closing price is: 1.12.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 10.2565. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 4 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 48.57. 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 218 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 -43. This is not a topping or bottoming area. The last signal was a sell 4 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 sell 1 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed up 0.000 at 1.122. Volume was 99% below average (consolidating) and Bollinger Bands were 29% wider than normal.

Open High Low Close Volume___
1.122 1.122 1.122 1.122 799

Technical Outlook
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 1.13 1.12 1.14
Volatility: 6 5 7
Volume: 70,680 99,284 131,237

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 1.2% below 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 volume flowing into and out of EUR= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on EUR= and have had this outlook for the last 10 periods.

The following two tabs change content below.
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.

You must be logged in to post comments :  
CONNECT WITH