Euro: USD/EUR (EUR=X) possible headwinds ahead

Euro: USD/EUR (EUR=X) possible headwinds ahead

Euro: USD/EUR (EUR=X) possible headwinds ahead

German services PMI slowed to 54.5 in July, down from 55.8 a month earlier. The eurozone indicator also lost ground, falling from 53.6 to 53.2. Germany’s industrial numbers were mixed. Factory orders jumped 2.5% in June, rebounding from a decline of 2.2% in May. However, industrial production posted a decline of 1.5% in June, its second decline in three months. Finally, Germany’s trade surplus slipped to EUR 18.1 billion in June, down from EUR 18.7 billion a month earlier.

U.S. equity markets had their worst one-day fall in 2019 on Monday, after China devalued its currency to a 10-year low against the dollar. The move prompted the U.S. to label China as a “currency manipulator”. China also retaliated against the U.S. pledge to hit Chinese products with a new 10% tariff, as Beijing said it would no longer purchase any U.S. agricultural products. The yen continued to attract safe-haven flows, and has jumped 2.8% since the end of July.

In the U.S., the ISM Non-Manufacturing PMI slowed to 53.7 in July, its lowest level in almost three years. This is indicative of weaker expansion in the services sector. The week wrapped up with inflation data, which remains at low levels. The producer price index was unchanged at 0.2%, matching the forecast. The core release declined by 0.2%, its first decline of the year.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 1.12.

The projected upper bound is: 1.13.

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 5 white candles and 4 black candles for a net of 1 white candles. During the past 50 bars, there have been 24 white candles and 25 black candles for a net of 1 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 50.3141. This is not an overbought or oversold reading. The last signal was a sell 3 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 47.18. 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 258 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 57. This is not a topping or bottoming area. The last signal was a buy 7 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 down -0.004 at 1.117. Volume was 2% below average (neutral) and Bollinger Bands were 2% narrower than normal.

Open     High      Low     Close     Volume___
1.121 1.123 1.117 1.117 89,282
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.12 1.12 1.13
Volatility: 7 6 7
Volume: 95,042 78,026 120,478

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 1.1% below its 200-period moving average and is in an downward trend. Volatility is high 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 25 periods.

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