Euro: USD/EUR (EUR=X) weakness points towards potential further breakdown

Euro: USD/EUR (EUR=X) weakness points towards potential further breakdown

Euro: USD/EUR (EUR=X) weakness points towards potential further breakdown

EUR/USD managed to break lower from its consolidation yesterday, coming off the back of a rally into the 50% retracement and 200-day simple moving average (SMA).

However, given the mixed signals seen in a wider context (higher highs and lower lows), we need to see a break below $1.1432 to provide a more bearish outlook for the pair. Until then, there is a chance we could be retracing. Whether or not the price reacts to the 76.4% retracement at $1.1477 will go some way to telling us whether we are retracing or due to break further to the downside.

Overall, the bias in prices is: Downwards.

The projected upper bound is: 1.16.

The projected lower bound is: 1.13.

The projected closing price is: 1.15.

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 26 white candles and 24 black candles for a net of 2 white 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 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 24.6636. This is not an overbought or oversold reading. The last signal was a sell 2 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 37.96. 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. The last signal was a buy 45 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 -109.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 0 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed down -0.004 at 1.145. Volume was 12% below average (neutral) and Bollinger Bands were 23% wider than normal.

Open High Low Close Volume___
1.150 1.153 1.145 1.145 124,472

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 1.15 1.16 1.19
Volatility: 7 8 9
Volume: 128,055 135,897 139,193

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 3.8% below its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 11 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.

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