Euro: USD/EUR (EUR=X) Volatility Likely to Slow

Euro: USD/EUR (EUR=X) Volatility Likely to Slow

Euro: USD/EUR (EUR=X) Volatility Likely to Slow

Last week was an eventful one. The Conservative party secured a majority in the UK election and a major step forward was made in the US-China trade war. It resulted in a rise of volatility in EUR/USD which had been trading in unusually small ranges for the three weeks prior.

But the volatility might not be here to stay. With only two weeks left in the year, investors may start drifting into holiday mode which could see EUR/USD return to tight ranges.

Further, the economic calendar is quite light for the week ahead. Manufacturing and Services data were released shortly after the European open, but aside from that, there aren’t any market-moving reports scheduled this week.

Manufacturing data for the month thus far fell short of expectations. The purchasing manager’s index declined to 45.9 for the Eurozone versus an analyst estimate of 47.3. Besides the first reading of the year, this data has shown a contraction for every month in 2019.

The services sector fared a bit better, rebounding to a four-month high at 52.4 to beat out analyst expectations. Nevertheless, IHS Markit who releases the report indicated it was the worse quarter in six years when taking into account a composite of both the services and manufacturing figures.

Technical Analysis

The rally in EUR/USD stopped short last week at some fairly important resistance. on a weekly chart, the 50 moving average came into play. On a daily chart, a horizontal level at 1.1179 proved to be a hurdle yet again. The same level had held the pair lower in October and early November.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 1.11.

The projected upper bound is: 1.12.

The projected lower bound is: 1.11.

The projected closing price is: 1.11.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 3 black candles for a net of 3 white candles. During the past 50 bars, there have been 29 white candles and 20 black candles for a net of 9 white 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 59.5533. This is not an overbought or oversold reading. 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 62.96. 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. (ERROR: Function did not return a value)

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 117.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 6 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 buy 9 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed up 0.002 at 1.114. Volume was 25% below average (neutral) and Bollinger Bands were 13% narrower than normal.

Open     High      Low     Close     Volume___
1.112 1.116 1.112 1.114 54,760
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.11 1.11 1.12
Volatility: 4 4 6
Volume: 60,171 68,218 87,683

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 0.1% below its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 3 periods.

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