Euro: USD/EUR (EUR=X) Single Market Traders Prepare For ECB
Monday’s session saw the Euro to US Dollar exchange rate pull away from support at $1.12 to gain almost half-a-percent amid a data-sparse session with the single currency gains attributed to a lack of Greenback appeal. Into Tuesday, the EURUSD was last seen trading at $1.12716, maintaining the majority of Monday’s gains ahead of a relatively data-sparse session.
Wednesday’s ECB policy releases aren’t expected to yield any major changes from the central bank. However it will be interesting to note whether policymakers acknowledge a recent uptick in global manufacturing.
NFP data was strong, but the reaction in the US dollar was muted.
EURUSD continues to hold 1.12 support and there seems little on the horizon to break it.
The ECB meeting on Wednesday should be a routine affair.
After last week’s big calendar and start to the month and quarter, we are back to the usual quiet Monday today. It seems as if the market is still digesting Friday’s NFP numbers which showed the US jobs market is bouncing back strongly after some up and down prints this year. The headline figure of 196k beat consensus by nearly 20k and propelled equity markets such as the S&P500 back to new 2019 highs. The US dollar was also higher, but could not break above the heavy resistance in the high 97s and is fading lower again to start the week.
This week has less data, but still has the potential to be volatile as the usual narratives vie for the market’s attention. The largest story in terms of global consequences continues to be the ongoing trade war and the hoped for trade deal. This could be even more important for President Trump in light of last week’s NFP data which showed that manufacturing jobs fell 6,000 which is the first time this component has declined since July 2017. If the next election is to be fought on tough trade policies creating jobs for some of the struggling industries in the US, then this kind of data will be unwanted.
Trade talks are ongoing and there is the usual positive rhetoric from both sides which tells us very little about the actual details. Kudlow recently said a deal is getting “closer and closer”, but Trump himself said last week that it could take another four weeks to close a deal. This is on top of him saying he is in no rush. Certainly when campaigning starts for the elections he will want to have some sort of deal in place, but clearly the market should not hold its breath.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 1.13.
The projected upper bound is: 1.14.
The projected lower bound is: 1.12.
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 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 22 white candles and 26 black candles for a net of 4 black candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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 73.7051. This is not an overbought or oversold reading. The last signal was a buy 4 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 49.34. 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 168 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 17. This is not a topping or bottoming area. 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 buy 0 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed up 0.001 at 1.127. Volume was 49% below average (consolidating)(neutral) and Bollinger Bands were 20% wider than normal.
Open High Low Close Volume___
1.127 1.128 1.125 1.127 72,229
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.12 1.13 1.15
Volatility: 4 6 8
Volume: 129,918 142,702 141,643
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 1.6% below its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 7 periods.