Euro: USD/EUR (EUR=X) maintains its bearish stance despite decreased demand for safety
Financial markets were in a better mood this Monday, amid some encouraging news related to the coronavirus pandemic. According to the latest data available the contagion curve and the death toll seem to be flattening in Italy, Spain and New York, the three places where coronavirus has hit the hardest. Nothing is yet done and things can worsen again. Furthermore, most major economies continue in lockdown, and governments have not yet figure out how to get out of it, as the most likely scenario is that the spread of the virus will take a turn to the worse. Equities rallied worldwide while high-yielding currencies recovered with uneven results.
In the case of EUR/USD, the pair spent the day hovering around the 1.0800 threshold, as the shared currency got undermined by the EU Sentix Investor Confidence index plummeted to -42.9 in April, down from -17.1 in March and worse than the -30.3 expected. This Tuesday, the macroeconomic calendar will remain quite light, as Germany will release February Industrial Production, while the US will only publish minor reports that have no chances of affecting the price.
EUR/USD Short-Term Technical Outlook
The EUR/USD pair has fallen to a daily low of 1.0767, while the upside remained capped by sellers aligned around 1.0830, the 61.8% retracement of the latest bullish run. The short-term picture is bearish, as, in the 4-hour chart, the pair is developing below bearish moving averages, wit the 20 SMA accelerating south below the larger ones and nearing the current level. Technical indicators, however, had spent the day directionless within negative levels, maintaining the risk skewed to the downside without confirming further declines ahead.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 1.10.
The projected upper bound is: 1.10.
The projected lower bound is: 1.06.
The projected closing price is: 1.08.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 23 white candles and 26 black candles for a net of 3 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 10.8254. 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 41.79. 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 sell 20 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 -49. This is not a topping or bottoming area. The last signal was a buy 10 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 sell 2 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed up 0.001 at 1.081. Volume was 81% below average (consolidating) and Bollinger Bands were 85% wider than normal.
Open High Low Close Volume___
1.079 1.081 1.078 1.081 15,940
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.09 1.10 1.11
Volatility: 15 13 8
Volume: 117,249 103,759 78,820
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 2.3% below its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 3 periods.