Euro: USD/EUR (EUR=X) room for EUR to weaken further to 1.1350
We highlighted yesterday “time appears to be running out for further weakness” and the subsequent swift and sharp plunge in EUR came as a surprise, albeit a pleasant one. We have been anticipating a move to 1.1400 since last Friday (19 Oct, spot at 1.1455) wherein we indicated that the “major 1.1400 support appears to be vulnerable”. EUR tested our ‘resolve’ by holding above 1.1430 for close to a week before finally caving in.
Despite yesterday’s sharp drop, we believe it is premature to expect the start of a bearish phase. However, there appears to be ample room for EUR to weaken further to 1.1350 in the coming days. The next support is obviously at the year-to-date low near 1.1300 and at this stage, the prospect for a sustained break of this level is not high. That said, as long as the ‘key resistance’ at 1.1480 (level previously at 1.1550) is intact, the odds for a fresh low would continue to increase.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 1.16.
The projected upper bound is: 1.15.
The projected lower bound is: 1.12.
The projected closing price is: 1.14.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.
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 13.2183. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 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 34.29. 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 50 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 -168.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 4 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 sell 5 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed down -0.002 at 1.137. Volume was 14% above average (neutral) and Bollinger Bands were 20% narrower than normal.
Open High Low Close Volume___
1.139 1.143 1.135 1.137 159,258
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.15 1.16 1.19
Volatility: 7 8 8
Volume: 130,662 133,208 139,154
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 4.4% below its 200-period moving average and is in an downward trend. Volatility is low 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 16 periods.