Euro: USD/EUR (EUR=X) might see a notable pickup in volatility

Euro: USD/EUR (EUR=X) might see a notable pickup in volatility

Euro: USD/EUR (EUR=X) might see a notable pickup in volatility

After a few weeks of trading in a narrow range, EUR/USD might see a notable pickup in volatility in the week ahead with several events that the markets will be watching.

From a political standpoint, there are two major drivers for the markets this week. The UK election is one of them and as the outcome stands to impact how Brexit will play out from here, EUR/USD is likely to be affected.

Investors will also be closely monitoring ongoing developments in the trade war between the US and China. On December 15, planned tariffs are to take effect and therefore there is some expectation for a resolution ahead of it so that these tariffs can be canceled.

Trump said last week that trade talks are going smoothly but neither confirmed or denied that things were on pace for a resolution by December 15.

Aside from political events, the week ahead will provide some forward guidance from the Federal Reserve and the European Central Bank.

The Federal Reserve meets on Wednesday and the ECB meets on Thursday. Both are expecting to keep monetary policy on hold at their last meeting of the year.

Technical Analysis

Friday US jobs report was stronger than expected and triggered a broadly stronger dollar. This led to a fall in EUR/USD below a fairly notable level at 1.1072.

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: 1.10.

The projected closing price is: 1.11.

Candlesticks

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 30 white candles and 20 black candles for a net of 10 white 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 50.7459. This is not an overbought or oversold reading. The last signal was a sell 2 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 56.75. 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 70 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 79. This is not a topping or bottoming area. The last signal was a sell 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 buy 5 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed up 0.003 at 1.109. Volume was 20% below average (neutral) and Bollinger Bands were 36% narrower than normal.

Open     High      Low     Close     Volume___
1.106 1.110 1.106 1.109 59,206
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.11 1.11 1.12
Volatility: 5 4 6
Volume: 57,648 68,394 89,044

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 0.5% below its 200-period moving average and is in an downward 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 bearish on EUR= and have had this outlook for the last 19 periods.

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