Euro: USD/EUR (EUR=X) Focus on Fed Rate Cut Bets Rise
The Euro to US Dollar exchange rate (EUR/USD) extended the weekly gains through Wednesday’s session, breaking the upper bound of Fibre’s May range to trade at a six week best as investors continued to ramp up Fed interest rate cut bets.
The recent softening of the Greenback comes on the back of increased expectations for monetary policy easing as investors reassess the outlook for the US economy – with the now multi-fronted trade-war a particular source of concern.
While markets had begun to tentatively price the prospects of a rate cut at the turn of the year, recent weeks have seen expectations of policy easing soar as global trade relations continue to deteriorate and investors look to a larger than previously anticipated drag on the US economy.
This week’s commentary further cemented expectations of policy easing with St Louis Federal Reserve President’s dovish comments earlier in the week echoed by Fed Chair Jerome Powell in Wednesday’s ‘Fed Listens’ conference.
The Fed will “will act as appropriate to sustain the expansion,” amid “trade negotiations and other matters” said Powell, comments which were interpreted as indicative of potential easing.
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.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black 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 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 63.1970. This is not an overbought or oversold reading. The last signal was a sell 7 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 54.05. 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 210 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 78. This is not a topping or bottoming area. The last signal was a sell 0 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 3 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed up 0.000 at 1.122. Volume was 100% below average (consolidating) and Bollinger Bands were 25% narrower than normal.
Open High Low Close Volume___
1.123 1.123 1.122 1.122 67
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.12 1.12 1.14
Volatility: 6 5 7
Volume: 88,308 107,987 133,285
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 1.3% 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 2 periods.