The EUR/USD rate has recovered back to 1.1285 at the time of writing on Tuesday, however it will need to break back above 1.1295 if bulls want a signal to buy again says well-known Economist and trader Shayne Heffernan, CEO and Founder of HEFFX.
After virtually two weeks of corrective drift, we have been looking for signs that this retracement on EUR/USD is being bought into.
Is yesterday’s strong positive candle the trigger for a market ready to pull higher once more? On a technical basis, plenty of positives are showing now.
The corrective drift has found support at $1.1167, at a five week uptrend that is also just above the breakout support of the March high at $1.1145.
Daily momentum indicators look ready. Unwinding a bullish configuration, the RSI has picked up from 50 while Stochastics are threatening to bottom out with a bull cross around 30.
A little two week downtrend is being breached this morning because the market is consolidating too. There has been no overt buy signal yet though.
On the hourly chart, a move above $1.1295 would suggest the bulls are buying into weakness. The hourly chart shows $1.1200/$1.1230 is supportive now and needs to be built from to continue the recovery.
Dollar Strength Fades
Broad market sentiment remains cautious and will not have been helped by comments from White House trade advisor Peter Navarro last night who recommended that the trade deal with China was “over”.
In what should have been a stinging behind the scenes rebuke for Navarro, this prompted him to put out an almost instant clarification comment that his words had been taken “out of context”.
It also prompted a tweet from President Trump that the deal was still fully intact. Another instance of an astounding lack of clarity, mixed messaging and professionalism, but ultimately, nothing overly surprising.
Markets reacted with a spike into (and then out of) safe haven assets over night. Interestingly though, that aside there are beginning to be some signs that perhaps a shift in positioning is taking place again.
Yesterday saw the greenback Index form a “bearish key one day reversal”, while there have been moves out of the yen too this morning.
These forex moves could only be minor for now and yet to be confirmed, however could they start to signal something more positive again? The yen and greenback are performing far better in the past couple of weeks as the risk rally has corrected.
Signs of traders moving away from the greenback and yen could be an indication of improving risk appetite once more. For that to be sustainable, the second wave re-infections in the United States probably need to be kept in check.
The flash PMIs for June will be watched today for signs of improvement in economic prospects as economies continue to move through their re-opening procedures.
Euro/US Dollar Exchange Rate
Today’s Forex Rates
Euro/US Dollar FX Polls
Overall, the bias in prices is: Upwards.
By the way, prices are vulnerable to a correction towards 1.11.
The projected upper bound is: 1.14.
The projected lower bound is: 1.11.
The projected closing price is: 1.13.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white 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 43.6146. This is not an overbought or oversold reading. The last signal was a buy 1 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 60.35. 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 sell 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 -9. This is not a topping or bottoming area. The last signal was a buy 1 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 up 0.003 at 1.129. Volume was 37% below average (neutral) and Bollinger Bands were 23% narrower than normal.
Open High Low Close Volume 1.126 1.131 1.123 1.129 73,433
Technical Outlook Short Term: Neutral Intermediate Term: Bullish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 1.13 1.10 1.10 Volatility: 9 9 9 Volume: 120,010 114,389 87,896
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 2.4% above its 200-period moving average and is in an upward 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 bullish on EUR= and have had this outlook for the last 23 periods.
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