Euro: USD/EUR (EUR=X) towards the 1.08 level

Euro: USD/EUR (EUR=X) towards the 1.08 level

Euro: USD/EUR (EUR=X) towards the 1.08 level

The Euro has gained during the trading session again on Thursday, reaching towards the major sell off area, and at this point I think that it makes quite a bit of sense that we will see this market pullback. Most of what’s been driving this currency pair has been Europeans taking money back from New York, driving flows back across the Atlantic Ocean. However, when you look at the underlying fundamentals between the two economies, it is only a matter of time before the Euro gets hammered again, as the economic situation in the United States is much stronger than the European Union.

When you look at the significant sell off heading into this, it does make sense that there was a relief rally anyway. At this point, it’s likely that the market will go looking towards the 1.08 level and perhaps even lower than that longer term. The Euro doesn’t reflect the lack of yields in the European Union, nor does it reflect the fact that money has been reaching towards US bonds. Longer-term, I do think that we not only go lower from here, but I think we go much lower. Rallies at this point continue to be selling opportunities but we do not have the candlestick to suggest that quite yet. The simple matter of taking your time and being patient should pay off nicely, as it is only a matter of time before the markets focus less on viruses and economic reality. We are in a downtrend, but had gotten a bit oversold.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 1.10.

The projected upper bound is: 1.11.

The projected lower bound is: 1.09.

The projected closing price is: 1.10.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 2 black candles for a net of 5 white candles. During the past 50 bars, there have been 24 white candles and 25 black candles for a net of 1 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 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 93.0109. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 5 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 58.83. 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 5 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 201.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 6 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 3 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed up 0.000 at 1.100. Volume was 99% below average (consolidating) and Bollinger Bands were 60% wider than normal.

Open     High      Low     Close     Volume___
1.100 1.100 1.100 1.100 330
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.09 1.10 1.11
Volatility: 7 6 6
Volume: 73,676 62,943 72,027

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 0.9% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect moderate flows of volume out of EUR= (mildly bearish). Our trend forecasting oscillators are currently bearish on EUR= and have had this outlook for the last 30 periods.

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