Euro: USD/EUR (EUR=X) ready to tackle the next resistance at 1.1745

Euro: USD/EUR (EUR=X) ready to tackle the next resistance at 1.1745

Euro: USD/EUR (EUR=X) ready to tackle the next resistance at 1.1745

While we have been expecting a ‘robust recovery’ in EUR since last Tuesday (see update on 21 Aug, spot at 1.1485), the pace and extent of the rally over the past 2 days exceeded our anticipation (note that EUR rose by +1.21% over Friday and Monday, the largest 2day gain in 3 months).

We highlighted yesterday (27 Aug, spot at 1.1625), the “probability for a clear break of 1.1670 has increased considerably” and a NY closing above this level would indicate that EUR is ready to tackle the next resistance at 1.1745. EUR subsequently hit a high of 1.1693 during NY hours before ending the day at 1.1677. In other words, there is still scope for further EUR strength (at least for another few more days) and the focus is at 1.1745. The next resistance is at 1.1790 and at this stage, the odds for a sustained move above this level are not that high. All in, only a break of the ‘key support’ at 1.1590 (level previously at 1.1545) would indicate that a short-term top is in place.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 1.18.

The projected lower bound is: 1.15.

The projected closing price is: 1.17.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 9 white candles and 1 black candles for a net of 8 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 89.0718. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 7 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 60.24. 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 8 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 130.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 8 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 0.002 at 1.169. Volume was 0% above average (neutral) and Bollinger Bands were 17% wider than normal.

Open High Low Close Volume___
1.168 1.173 1.166 1.169 145,568

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 1.15 1.16 1.20
Volatility: 7 8 9
Volume: 141,823 146,618 133,229

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 2.2% below its 200-period moving average and is in an upward 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 bullish on EUR= and have had this outlook for the last 0 periods.

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