Euro: USD/EUR (EUR=X) trading sideways below the 1.1320 resistance
The current bounce in the dollar was triggered by news over the weekend that trade talks between China and the US are progressing. This caused a correlated move across the financial markets.
Treasury yields bounced higher with the 10-year rallying from a psychological 2% yield. Gold prices fell back below $1400 after a significant technical breakout in the prior week. Equity markets fell under a bit of pressure with the S&P 500 falling back from major resistance found on the larger time frames. And of course, the dollar index (DXY) recovered back above its 200 DMA.
Most of these moves have already been wiped out. The 10-yield has dropped below 2% which I consider to be very significant. It is currently at levels not seen since the fourth quarter of 2016.
The other markets have reversed also. Gold is back above $1400 and SPY broke to a record high yesterday and touched the psychological $300 price point. I believe this suggests that the markets don’t think there will be a resolution to the trade war anytime soon and that this issue won’t impact the Fed’s decision in a positive way at the July meeting.
I do think it is important to look at both sides and an argument can be made for a weaker dollar. Specifically, the divergence between the dollar and the above-mentioned instruments. After all, the dollar has not reversed its gains in the manner that the other assets have reversed.
However, with the current fundamental backdrop, it does not seem reasonable to me to expect EUR/USD to fall much further. After all, the pair trades a mere 1.5% from multi-year lows. Speculating a decline to a two-year low in EUR/USD doesn’t make much sense to me. Even considering how aggressive the markets are pricing in easing measures for July.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 1.13.
The projected upper bound is: 1.14.
The projected lower bound is: 1.12.
The projected closing price is: 1.13.
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 27 white candles and 23 black candles for a net of 4 white candles.
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 12.2557. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 6 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 50.28. 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 231 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 -39. This is not a topping or bottoming area. The last signal was a sell 7 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 sell 3 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed unchanged at 1.128. Volume was 99% below average (consolidating) and Bollinger Bands were 21% wider than normal.
Open High Low Close Volume___
1.128 1.128 1.128 1.128 926
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.13 1.12 1.13
Volatility: 5 5 7
Volume: 62,656 87,068 126,580
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 0.4% below its 200-period moving average and is in an upward trend. Volatility is high 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 bullish on EUR= and have had this outlook for the last 23 periods.
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