Euro: USD/EUR (EUR=X) Tumble on Highly Concerning German Data
The shared currency has been unable to benefit from weakness in rivals as the US Dollar (USD) recovers from fears of an aggressively dovish Federal Reserve, and the currency has not found much support in recent Eurozone data either.
Rather than show any fresh signs of resilience or recovery in the Eurozone economy, the latest Eurozone data instead continues to show worrying signs of continued weakness in Germany’s economic activity.
Today saw the publication of the Eurozone’s July PMI projections from Markit. Perhaps most notably, manufacturing was even weaker than expected in many key prints.
German manufacturing especially was particularly concerning. The figure was expected to have recovered slightly from 45 to 45.1 in July, but instead slumped to an even more dire contraction of 43.1.
The data meant that the Eurozone’s overall manufacturing print contracted as well, and the bloc’s composite figure was a slow 51.5.
Speculation that the European Central Bank (ECB) could take a more dovish stance on Eurozone monetary policy going forward also flared up following the data.
While most analysts do not expect the ECB to cut Eurozone interest rates as soon as tomorrow’s policy decision, many investors are betting that a rate cut is possible. This leaves markets even more hotly anticipating the decision.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 1.12.
The projected lower bound is: 1.10.
The projected closing price is: 1.11.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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 7.7950. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 11 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 36.47. 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 245 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 -165.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 11 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 17 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed unchanged at 1.114. Volume was 96% below average (consolidating) and Bollinger Bands were 7% wider than normal.
Open High Low Close Volume___
1.114 1.114 1.114 1.114 4,246
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.12 1.12 1.13
Volatility: 6 6 7
Volume: 68,313 78,521 123,146
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 1.5% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. 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 12 periods.