Euro: USD/EUR (EUR=X) Trying to Find Bottom at Gap

Euro: USD/EUR (EUR=X) Trying to Find Bottom at Gap

Euro: USD/EUR (EUR=X) Trying to Find Bottom at Gap

The Euro has reached down to fill the gap, and now has turned things back around to form a bit of a supportive looking candle. Nonetheless, I am not willing to buy the Euro right now because quite frankly the European economy is far too weak to get excited about owning the currency. However, I recognize that there probably is a bounce coming but that bounce is probably more or less a relief rally than anything else.

If the market was to break down below the bottom of the weekly candlestick, then it’s likely that the market is going to go looking towards the 1.07 level, and then eventually the 1.05 level after that. Ultimately, I am looking for an opportunity to start shorting closer to the 1.09 handle, and then eventually the 1.10 level after that. Looking at this market, the last couple of weeks have been rather negative and a bit of a free-for-all. There is almost always a bit of a retrace, and I think it is likely that we will see that in this market. However, that should be thought of more or less as an opportunity to pick up the US dollar “on the cheap.” However, if the market did break down below the bottom of the weekly candlestick that would show even more concerned, so I anticipate that the market is likely to see the Euro fall against almost everything. It’s not until the market breaks above 1.10 that I would be comfortable going long.

Technical Indicators

Overall, the bias in prices is: Downwards.

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

The projected upper bound is: 1.09.

The projected lower bound is: 1.07.

The projected closing price is: 1.08.

Candlesticks

A black body occurred (because prices closed lower 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 22 white candles and 28 black candles for a net of 6 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 50.0000. This is not an overbought or oversold reading. The last signal was a buy 1 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 34.12. 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 1 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 -52. This is not a topping or bottoming area. The last signal was a buy 2 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 33 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed down -0.001 at 1.083. Volume was 98% below average (consolidating) and Bollinger Bands were 90% wider than normal.

Open     High      Low     Close     Volume___
1.084 1.085 1.081 1.083 1,042
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.08 1.10 1.11
Volatility: 5 5 6
Volume: 66,016 59,906 72,083

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 2.4% 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 very strong flows of volume out of EUR= (bearish). Our trend forecasting oscillators are currently bearish on EUR= and have had this outlook for the last 26 periods.

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