Euro: USD/EUR (EUR=X) Trades Lower as Fed Reaffirms ‘Patient’ Policy Stance

Euro: USD/EUR (EUR=X) Trades Lower as Fed Reaffirms ‘Patient’ Policy Stance

Euro: USD/EUR (EUR=X) Trades Lower as Fed Reaffirms ‘Patient’ Policy Stance

EUR/USD Exchange Rate Steadies Following Losses

The Euro to US Dollar (EUR/USD) exchange rate is holding steady this morning after slipping from a one-week high yesterday evening following the Federal Reserve’s policy meeting.

At the time of writing the EUR/USD exchange rate is virtually unchanged this morning, but is trading around half a cent below the week’s best levels at $1.1212 on the inter-bank market.

US Dollar (USD) Rallies as Fed Quashes Rate Cut Speculation

While still on the back foot against the Euro (EUR) this week, the US Dollar (USD) bounced back from its worst levels late on Wednesday in the wake of the Federal Reserve’s latest policy decision.

Unsurprisingly the Fed voted to leave interest rates on hold again this month as it reaffirmed its commitment to remaining ‘patient’ with monetary policy this year.

Commenting on the outlook for Interest rates, Fed Chair Jerome Powell, said: ‘We do think our policy stance is appropriate right now. We don’t see a strong case for moving in either direction.’

This appeared to quell recent concerns that a rate cut could be on the table for the Fed this year, helping the US Dollar to pare some of its losses yesterday evening.

Westpac Bank’s FX strategy team said:

‘Markets did not get hints of possible rate cuts from the Fed, causing US bond yields and the US Dollar to rise in response.

‘While the Fed reiterated their non-committal pledge to remain ‘patient’, the broader narrative is more optimistic and not consistent with market pricing for two Fed cuts by the end of 2020.’

The Fed’s wider outlook for the US economy also lent support to USD exchange rates on Wednesday, with Powell forecasting the recent slowdown in inflation is likely to be temporary.

Euro (EUR) Exchange Rate Muted Following Contraction in German Retail Sales

Meanwhile the Euro (EUR) is trading in a narrow range this morning, following the publication of Germany’s retail sales figures.

According to data published by federal statistics agency Destatis, retail sales growth were reported to have contracted -0.2% in March, down from 0.5% growth the previous month, just beating expectations of a -0.4% drop.

Destatis reported the contraction was mostly due to sharp drops in sales of food, drink and tobacco, driving in part by the later timing of Easter this year.

EUR/USD Exchange Rate Forecast: US Payrolls to Surprise in April?

Looking ahead, trade in the Euro US Dollar (EUR/USD) exchange rate is likely to remain busy right up to the end of the session, with the publication of US non-farm payrolls on Friday afternoon likely to act as a major catalyst of movement.

Economists previously forecast that payrolls numbers would see a modest decline in April, sliding from 196,000 to 185,000.

However following on from a bumper ADP employment report earlier in the week, some economists are now more upbeat, with the US Dollar likely to surge if Non-Farm Payrolls show a similarly impressive increase.

In the meantime the publication of the Eurozone Consumer Price Index may offer some support for the Euro tomorrow morning as economists expect it will show core inflation in the bloc picked back up last month, rebounding from 0.8% to 1%.

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 1.13.

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 5 white candles and 5 black candles. During the past 50 bars, there have been 24 white candles and 25 black candles for a net of 1 black candles.

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 58.0048. This is not an overbought or oversold reading. The last signal was a buy 3 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 41.55. 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 185 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 -51. This is not a topping or bottoming area. The last signal was a buy 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 sell 7 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed down -0.002 at 1.117. Volume was 25% below average (neutral) and Bollinger Bands were 0% wider than normal.

Open High Low Close Volume___
1.120 1.122 1.117 1.117 101,555

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 1.12 1.13 1.14
Volatility: 5 6 7
Volume: 103,503 129,941 138,498

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 2.1% below its 200-period moving average and is in an downward trend. Volatility is 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 7 periods.

The following two tabs change content below.
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.