Euro: USD/EUR (EUR=X) Volatility stands to slow in the session ahead as there are no high impacting economic reports scheduled for release

Euro: USD/EUR (EUR=X) Volatility stands to slow in the session ahead as there are no high impacting economic reports scheduled for release

Euro: USD/EUR (EUR=X) Volatility stands to slow in the session ahead as there are no high impacting economic reports scheduled for release

A recovery attempt in EUR/USD on Tuesday was quickly met with sellers on an approach to 1.1120 and the pair has since given back gains and posted a fresh three-week low. Volatility stands to slow in the session ahead as there are no high impacting economic reports scheduled for release.

The ECB is not expected to act on Thursday although Bloomberg reported that 90% of analysts expect a change to the inflation strategy. It would be the first change in 17 years if President Lagarde decides to make the change.

The change to the approach in inflation is expected as the ECB continues to run below their inflation targets despite aggressive and unconventional easing since mid-2014.

EUR/USD has been lingering near a notable support confluence and a range might develop ahead of the ECB meeting as traders await the outcome of it before putting on positions.

The dollar continues to show strength as the trade-weighted index (DXY) rallied to a fresh three-week high on Monday. However, the strength has not been broad-based this week and resistance that held DXY lower in late December seems to be deterring buyers at this stage. At least, over the near-term.

Technical Analysis

Yesterday’s price action shows that sellers are quick to jump in on rallies but at the same time, declines below 1.1090 have fizzled out quickly over the last few weeks.

Technical Indicators

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.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 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 16.7788. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 7 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 44.89. 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 101 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 -112.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 14 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 10 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed up 0.001 at 1.109. Volume was 6% below average (neutral) and Bollinger Bands were 12% narrower than normal.

Open     High      Low     Close     Volume___
1.108 1.110 1.107 1.109 60,165
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.11 1.11 1.11
Volatility: 3 4 5
Volume: 63,201 58,023 76,747

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 0.4% 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 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 3 periods.

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