Euro: USD/EUR (EUR=X) trade negotiations in Brussels will be crucial to monitor
The Euro will likely experience higher-than-usual volatility in the week ahead. The primary catalyst for potentially violent price action may be politically-based factors. These include the European election results and prospective candidates in the new EU parliament for positions in key regional institutions. Trade talks between EU trade ministers in Brussels may also warrant the attention of traders with exposure to the Euro.
The European elections take place between May 23-26 and a final result will likely be published in the late hours on Sunday. Eurosceptic parties are estimated to win up to one-third of all seats in the EU legislative arm. This leaves Europe potentially at the mercy of anti-establishment candidates, who historically have had a penchant of disrupting markets with their agendas.
A greater number of Eurosceptic parties in the EU means that there is a higher probability of anti-establishment candidates that will occupy influential positions in key European institutions. On May 28, EU leaders will be discussing potential contenders for the Commission President, European Council and the ECB. Depending on the ideological make-up of the most popular candidates it could undermine confidence in the Euro.
Compounding the risk will be a meeting in Brussels between EU trade ministers who will be discussing the state of trade relations with the US. One of the topics that will be heavily covered will be ways to avoid having Washington impose auto tariffs against Europe. In a region where weakness in economic activity is still persisting, a trade war with the US would only dampen the outlook and hurt the Euro.
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.
A white body occurred (because prices closed higher 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 23 white candles and 27 black candles for a net of 4 black candles.
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 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 93.1746. 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 51.80. 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 202 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 32. This is not a topping or bottoming area. The last signal was a buy 1 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 1 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed up 0.001 at 1.121. Volume was 100% below average (consolidating) and Bollinger Bands were 54% narrower than normal.
Open High Low Close Volume___
1.119 1.121 1.119 1.121 483
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.12 1.12 1.14
Volatility: 3 5 7
Volume: 86,651 115,179 134,989
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 4 periods.