Euro: USD/EUR (EUR=X) Some dollar volatility

Euro: USD/EUR (EUR=X) Some dollar volatility

Euro: USD/EUR (EUR=X) Some dollar volatility

The greenback has been the main mover on currency markets within the past seven days. In the early part of last week, it had been on the back foot as signs of progress in the race for a Covid-19 treatment supported risk appetite. The currency managed to recovery some ground as rising US-China tensions acted as a headwind to sentiment. Although, it still remained slightly down on the week.

In level terms, this is mirrored in EUR/USD, which traded in a $1.08- 1.10 range last week, opening this morning up near the $1.09 level.

At the same time, cable (GBP/USD) is working in the upper half of the $1.21-1.22 range. Meanwhile, EUR/GBP is changing hands close to the center of the 89-90p band.

Elsewhere on financial markets, short-dated Gilt yields hit record lows last week, with 2-year yields falling to –0.08%. there’s growing speculation that the BoE may cut rates below zero.

This was fuelled by Governor Bailey’s comments that negative rates are presently “under active review” by the central bank.

Turning to the week ahead, there’s a comparatively quiet look to the Eurozone macro data schedule. The May print of the German Ifo (due today) and flash reading of HICP inflation for the same month are the highlights. Away from the data, the European Commission is due to outline its proposal for the EU’s Recovery Fund on Wednesday, that may cause some event risk for the euro.

Across the Atlantic, April consumption figures will feature. A sharp fall in consumer spending is forecast, however greenback impact could also be restricted. The currency could prove more sensitive to shifts in risk appetite linked to ongoing US-China tensions and Covid-19 news flow. In the UK, there’s very little out to influence sterling.

Euro/US Dollar Exchange Rate

Euro/Sterling Exchange Rate

Sterling/US Dollar Exchange Rate

Today’s Forex Rates

Euro FX Polls

Economic Events

Shayne Heffernan Trade Idea

“The 1.0750 level underneath is huge support, and even caused a bit of a hammer from the previous monthly candle. that’s one thing to pay attention to because if we break down below the bottom of the range, that’s a serious breach of support. At that time, i think that the euro would go looking for an exchange rate at the 1.0650 level, followed by the 1.05 level.”

“Below that level would be an absolute collapse of the euro, based upon not only the particular price itself but also historical charts. Remember, you’ll be able to look at a synthetic euro in the sense of combining all of the currencies in the same weighting as they’re represented in the euro. By that measurement, a break down below the 1.05 level might have ramifications for the market to fall the way down to the 0.80 below. Obviously, that is an awfully long term call if that happens.” Shayne Heffernan PhD in Economics

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 1.11.

The projected lower bound is: 1.07.

The projected closing price is: 1.09.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black candles.

A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).

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 51.5790. This is not an overbought or oversold reading. The last signal was a sell 2 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 51.48. 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 54 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 35. This is not a topping or bottoming area. The last signal was a sell 1 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 down -0.000 at 1.090. Volume was 67% below average (consolidating) and Bollinger Bands were 44% narrower than normal.

Open     High      Low      Close      Volume
1.090    1.091     1.087    1.090      34,405
Technical Outlook
Short Term:        Neutral
Intermediate Term: Bullish
Long Term:         Bearish
Moving Averages: 10-period       50-period          200-period
Close:           1.09            1.09               1.10
Volatility:      7               12                 9
Volume:          104,310         116,963            83,997

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 1.0% below 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 moderate flows of volume into EUR= (mildly bullish). Our trend forecasting oscillators are currently bullish on EUR= and have had this outlook for the last 2 periods.

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