Euro: USD/EUR (EUR=X) Manufacturing PMI data Softens in December

Euro: USD/EUR (EUR=X) Manufacturing PMI data Softens in December

Euro: USD/EUR (EUR=X) Manufacturing PMI data Softens in December

The final reading of the Eurozone manufacturing PMI for December softened to 46.3 from 46.9 in the prior month. The figure was ahead of analysts’ expectations with the median forecast at 45.9.

Chris Williamson of Markit, the company that produces the data, commented that despite the recent optimism, there is still a long way to go for a return of growth. He added that new order inflows continue to fall at the largest pace in over seven years.

Manufacturing PMI data released today showed most major Eurozone economies beating analyst expectations although all but France remain in a contraction in this sector.

EUR/USD was little moved on the data releases but fell rather sharply a minute before the European open.

The pair has shown strong upward momentum as of late and has gained roughly one and a quarter percent since the low last week. The exchange rate has benefited from a broadly weaker greenback as the trade-weighted dollar index (DXY) has declined to a fresh six-month low.

Technical Analysis

Early day price action signals the potential of more downside for EUR/USD although the recent upward momentum cannot be ignored.

A horizontal level at 1.1217 is an important one for the exchange rate. This level held the pair higher in November of 2018 and then lower in August last year. The upward momentum seems to be slowing in around the level over the past two sessions.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 1.11.

The projected upper bound is: 1.12.

The projected lower bound is: 1.11.

The projected closing price is: 1.12.

Candlesticks

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 28 white candles and 21 black candles for a net of 7 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.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

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 55.3805. This is not an overbought or oversold reading. The last signal was a sell 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 58.79. 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 buy 88 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 44. This is not a topping or bottoming area. The last signal was a sell 1 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 buy 4 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed down -0.000 at 1.117. Volume was 100% below average (consolidating) and Bollinger Bands were 9% narrower than normal.

Open     High      Low     Close     Volume___
1.117 1.117 1.117 1.117 126
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1.11 1.11 1.11
Volatility: 5 4 5
Volume: 34,246 57,164 80,307

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 0.2% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. 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 17 periods.

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