Euro: USD/EUR (EUR=X) Potential For a Range Break Ahead of ECB Meeting
EUR/USD is declining with momentum in early trading on Wednesday as the dollar is attempting to break to a one week high.
The US Dollar index (DXY), similar to EUR/USD, has been consolidating within a range for the past week. However, the index was last seen testing a critical resistance level that has contained rallies within the range.
A range break stands to signal a bullish breakout for the dollar, and a bearish directional bias for EUR/USD. However, with the European Central Bank meeting scheduled for Tuesday, the pair might struggle to make a substantial move in the session ahead.
The markets have fully priced in a 10 basis point cut for tomorrow’s meeting. Unless policymakers are more aggressive, EUR/USD stands to gain. The ECB has the option to introduce further QE, or at least announce it. Market participants will also be watching for any changes in forward guidance for the path of monetary policy.
In the session ahead, producer price index figures will be released in the early North American session. PPI in the United States is expected to come in unchanged in August after a 0.2% rise in the prior month.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 1.11.
The projected upper bound is: 1.11.
The projected lower bound is: 1.09.
The projected closing price is: 1.10.
During the past 10 bars, there have been 3 white candles and 6 black candles for a net of 3 black candles. During the past 50 bars, there have been 18 white candles and 30 black candles for a net of 12 black candles.
A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).
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 42.3848. This is not an overbought or oversold reading. The last signal was a buy 6 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 39.26. 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 7 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 -52. This is not a topping or bottoming area. The last signal was a buy 6 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 buy 3 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed unchanged at 1.101. Volume was 98% below average (consolidating) and Bollinger Bands were 12% narrower than normal.
Open High Low Close Volume___
1.101 1.101 1.101 1.101 1,419
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.10 1.11 1.13
Volatility: 5 6 6
Volume: 73,349 80,956 112,601
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 2.2% 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 47 periods.
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