Euro: USD/EUR (EUR=X) fresh selling wave following some dovish Fed commentary
The US Dollar Index, which lost its traction in the second half of the day after the IHS Markit’s and the ISM’s Manufacturing PMI figures for May came in below the market expectations, extended its decline in the last hour amid St. Louis Fed President James Bullard’s dovish remarks. Commenting on today’s PMI data, “The outlook in the manufacturing sector fell to its lowest point since October 2016 as the lengthening US trade dispute with China forces a reconsideration of global and national economic growth,” said FXStreet senior analyst Joseph Trevisani. “The purchasing manager’s index from the Institute for Supply Management dropped to 52.1 in May from April’s 52.8, missing its median expectation of 53.0.”
- US: Markit Manufacturing PMI comes in at 50.5 in May vs. 50.6 expected.
- US: ISM Manufacturing PMI falls to 52.1 in May from 52.8 in April.
Bullard argued a rate cut may be “warranted soon” amid the risks surrounding Trump administration’s trade policy and the low inflation. Following these comments, the CME Group FedWatch Tool’s odds of a Fed rate cut rose to 60% in July and 97% in December and the DXY slumped to its lowest level in three weeks at 97.20. At the moment, the index is down 0.35% on the day at 97.26.
Earlier today, the IHS Markit Manufacturing PMI for Germany and the euro area came in at 44.3 and 47.7, respectively, to match analysts’ estimates. Tomorrow, the Eurostat will be publishing the labour market and the inflation report for the euro area. Markets expect the core Consumer Price Index (CPI) to drop to 0.9% on a yearly basis in May from 1.3% in April.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 1.13.
The projected lower bound is: 1.12.
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 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.
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 77.8339. This is not an overbought or oversold reading. The last signal was a sell 5 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 58.62. 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 208 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 188.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. 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 1 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed up 0.000 at 1.124. Volume was 98% below average (consolidating) and Bollinger Bands were 28% narrower than normal.
Open High Low Close Volume___
1.124 1.125 1.124 1.124 2,446
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: 5 5 7
Volume: 89,527 110,586 133,886
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 1.1% 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 0 periods.