Euro: USD/EUR (EUR=X) Little Changed As Equities Plunge

Euro: USD/EUR (EUR=X) Little Changed As Equities Plunge

Euro: USD/EUR (EUR=X) Little Changed As Equities Plunge

An escalation in Coronavirus fears has led to a plunge in the global equity markets while safe-haven assets such as gold and bonds are firmly bid. The currency market is not reacting all that much to the sudden shift to risk aversion and volatility in FX is certainly subdued in comparison.

The S&P 500 is down just over two and a half percent in the pre-market and has nearly fully wiped out the gain for the month thus far in the decline that began on Thursday. The German DAX has fared worse and is down nearly 4% shortly after the European open. Meanwhile, gold prices have reached seven-year highs.

German ifo business climate index figures somewhat contradicted what the market is signaling today as sentiment among German managers improved slightly in February. The index climbed to 96.1 from 95.9 in the past reading which was ahead of analyst expectations. The report went on to say that the German economy does not seem to be affected by Coronavirus developments.

Technical Analysis

The euro stands to rally if the current shift to risk aversion is here to stay as the single currency is often used as a funding currency. At the moment, the pair appears to be little impacted by recent developments.

Technical Indicators

Overall, the bias in prices is: Downwards.

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

The projected upper bound is: 1.09.

The projected lower bound is: 1.08.

The projected closing price is: 1.08.

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 23 white candles and 27 black candles for a net of 4 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 56.2967. This is not an overbought or oversold reading. The last signal was a buy 1 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 36.92. 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 1 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 -39. This is not a topping or bottoming area. The last signal was a buy 2 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 33 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed up 0.001 at 1.085. Volume was 27% above average (neutral) and Bollinger Bands were 88% wider than normal.

Open     High      Low     Close     Volume___
1.084 1.087 1.080 1.085 79,909
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.08 1.10 1.11
Volatility: 5 5 6
Volume: 73,903 61,483 72,478

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 2.3% 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 moderate flows of volume out of EUR= (mildly bearish). Our trend forecasting oscillators are currently bearish on EUR= and have had this outlook for the last 26 periods.

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