Euro: USD/EUR (EUR=X) stuck in consolidation

Euro: USD/EUR (EUR=X) stuck in consolidation

Euro: USD/EUR (EUR=X) stuck in consolidation

The Euro initially gapped higher to kick off the trading session on Monday, but then pulled back to test the crucial 1.10 level. By doing so, it has shown significant strength but quite frankly at this point I think we are essentially stuck in consolidation. This is the normal attitude of the Euro so don’t be surprised at all. The 1.10 level of course is a large, round, psychologically significant figure so it does make sense that a certain amount of support will be built into the number. To the upside, we have seen the 1.11 level offer resistance previously, and most certainly the 1.12 level. Beyond that, the 200 day EMA is also in the same neighborhood.

With that in mind, I like the idea of fading rallies in the Euro, as it has been in a downtrend for three years. Quite frankly, not much has changed and although we are seeing signs of stabilization in some sectors of the EU, we are still looking at a European Union that is falling behind the United States. That being said, there will be the occasional bounce, and the fact that we saw this bounce at the 1.10 level should not be much of a surprise either. I’m not bullish, I’m still very bearish of this pair but recognize that perhaps we may have the occasional bounce that we need to pay attention to. This is one of those, but I’m not willing to play the “back-and-forth” game that could easily come into play. With this, I have no interest in buying, it will simply wait for the signs of exhaustion to take advantage of.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 1.11.

The projected upper bound is: 1.12.

The projected lower bound is: 1.10.

The projected closing price is: 1.11.

Candlesticks

A white body occurred (because prices closed higher 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 29 white candles and 21 black candles for a net of 8 white 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.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 85.3485. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 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 55.88. 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 65 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 101.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 13 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 0 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed up 0.000 at 1.108. Volume was 100% below average (consolidating) and Bollinger Bands were 46% narrower than normal.

Open     High      Low     Close     Volume___
1.108 1.108 1.108 1.108 149
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.10 1.10 1.12
Volatility: 4 5 6
Volume: 57,081 68,615 90,972

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 0.7% below its 200-period moving average and is in an downward 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 bearish on EUR= and have had this outlook for the last 14 periods.

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