Euro: USD/EUR (EUR=X) Weakness Continues

Euro: USD/EUR (EUR=X) Weakness Continues

Euro: USD/EUR (EUR=X) Weakness Continues

The euro has started the week out on a negative note, declining against all of the major currencies. A boost in risk sentiment is weighing on the exchange rate as Coronavirus fears have subsided and popular US equity indices rallied to record highs.

The price action over the last week or so provides a signal of confirmation that EUR/USD has resumed within the broader downtrend after recovering in the fourth quarter of last year. This will tend to entice investors interested in carry trades and stands to keep the pair well offered on recovery rallies.

The economic calendar has been rather light in the week thus far. Later today, ECB President Lagarde is scheduled to speak and Fed Chair Powell will testify before congress.

Powell’s speech is more likely to cause market volatility out of the two. However, prior communication has level set the market that the Fed will stay on hold for now, and if he holds to that view, the market reaction could be muted. Lagarde will be delivering opening remarks at an event in France, typically, these types of speeches do not move the markets.

Technical Indicators

Overall, the bias in prices is: Downwards.

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

The projected upper bound is: 1.10.

The projected lower bound is: 1.08.

The projected closing price is: 1.09.

Candlesticks

A white body occurred (because prices closed higher 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 25 white candles and 24 black candles for a net of 1 white candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 13.1818. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 9 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 30.97. This is not a topping or bottoming area. However, the RSI just crossed above 30 from a bottoming formation. This is a bullish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 0 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 -125.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 9 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 25 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed up 0.000 at 1.092. Volume was 97% below average (consolidating) and Bollinger Bands were 33% wider than normal.

Open     High      Low     Close     Volume___
1.091 1.092 1.091 1.092 2,039
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.10 1.11 1.11
Volatility: 5 5 5
Volume: 64,198 57,610 73,331

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 1.8% 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 18 periods.

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