Euro: USD/EUR (EUR=X) push-lower re-testing the 1.1250 level
Tomorrow marks Good Friday, meaning many western markets will remain closed, and Monday brings Easter and will see European markets remain on holiday. But ahead of the long weekend FX markets are showing as much excitement as they have so far in Q2, marked by a strong spike of strength in the US Dollar. This has helped EUR/USD to push-lower, re-testing the 1.1250 level that’s taken on greater importance of recent; and even GBP/USD is threatening to break its recent slumber as prices have pushed closer to the support zone around the 1.3000 psychological level.
The big question around the US Dollar is whether bulls can continue to push. The ascending triangle formation in the currency has been building for the past six months; with resistance showing at 97.71 and support taken from a bullish trend-line that originated in September of last year. The last resistance test in the US Dollar came in March, just after the ECB rate decision to announce a fresh round of TLTRO’s; and since then, buyers have continually shied away from re-tests of those highs, leading to a short-term bearish trend-line inside of the longer-term formation.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 1.13.
The projected lower bound is: 1.11.
The projected closing price is: 1.12.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 23 white candles and 25 black candles for a net of 2 black candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend. It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with FOREX EUR=), it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
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 38.0435. This is not an overbought or oversold reading. The last signal was a buy 11 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 43.15. 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 175 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 -6. This is not a topping or bottoming area. The last signal was a sell 0 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 7 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed down -0.006 at 1.123. Volume was 15% below average (neutral) and Bollinger Bands were 29% narrower than normal.
Open High Low Close Volume___
1.130 1.130 1.122 1.123 118,737
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.13 1.13 1.14
Volatility: 5 6 8
Volume: 119,929 137,640 140,527
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 1.8% 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 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 14 periods.