Euro: USD/EUR (EUR=X) slips as USD rebounds, Deutsche Bank eyes further losses

Euro: USD/EUR (EUR=X) slips as USD rebounds, Deutsche Bank eyes further losses

Euro: USD/EUR (EUR=X) slips as USD rebounds, Deutsche Bank eyes further losses

The Euro ceded ground to a resurgent Dollar Thursday but could have a way further to fall over the coming months, according to the latest strategy note from analysts at Deutsche Bank, who advocate betting against the single currency through the summer months.

Europe’s single currency enjoyed a morning of relative stability Thursday but it succumbed to selling pressure during the noon session after the Philadelphia Federal Reserve manufacturing PMI and a key housing market survey both surprised on the upside, helping the greenback turn the tables on its rivals.

The Dollar has reversed earlier losses in the noon session and even though most analysts are still forecasting it lower sooner or later, there’s increased uncertainty over exactly when the turn will come. Right now, geopolitical risks and concerns about the global economy are expected to keep it supported.

The Eurozone economic outlook has been dented of late by President Donald Trump’s latest offensive in the trade conflict with China, which has seen the White House lift from 10% to 25% the tariff levied on around $200 bn of annual imports from China.

It’s also set the ball rolling on a process that could see a 25% tariff imposed on China’s remaining $300 bn of exports to the U.S. China has since retaliated by lifting to 25% the tariff levied from around $60 bn of annual imports from the U.S., and now rhetoric from both governments is turning increasingly hostile.

The 10% tariff imposed on China’s exports to the U.S. took effect in the third quarter of 2018 and so too did a 25% tariff on exports of some $50bn. Some in the market fear that it’s no coincidence Eurozone economic growth fell by more than half that quarter, from 0.4% to 0.1%.

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.

Candlesticks

A black body occurred (because prices closed lower 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 24 white candles and 26 black candles for a net of 2 black candles.

A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).

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.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

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 15.5407. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 14 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 41.84. 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 196 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 -113.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 3 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 9 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed up 0.000 at 1.117. Volume was 97% below average (consolidating) and Bollinger Bands were 41% narrower than normal.

Open High Low Close Volume___
1.117 1.118 1.117 1.117 4,003

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

Moving Averages: 10-period 50-period 200-period
Close: 1.12 1.12 1.14
Volatility: 3 5 7
Volume: 102,326 121,322 136,649

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 1.9% below its 200-period moving average and is in an upward 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 bullish on EUR= and have had this outlook for the last 3 periods.

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