Forex Futures Morning Commentary

Euro-FX:

The euro is trading weaker this morning extending the prior sessions weaker close. Trend indicators are indicating a bearish market and the overall strength of the trend is strong, as indicated by the ADX. Momentum readings are also bearish. However, the recent upturn in the difference between the MACD and the MACD signal line may indicate a short term rally over the next few days and should be watched.

TREND INDICATORS:

Simple Moving Average (10-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 10-Day simple moving average has a strong bearish bias.

Simple Moving Average (25-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 25-Day simple moving average has a strong bearish bias.

Simple Moving Average (50-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 50-Day simple moving average has a strong bearish bias.

ADX: The Average Directional Change (ADX) indicates the strength of a markets underlying trend. A rising ADX is interpreted as building trend strength, while a falling ADX indicates weakness in the underlying trend and the potential of a market reversal. On this market, the 14-Day ADX is rising, while the long term trend, based on a 50-Day moving average, is down. As the ADX is rising this indicates that the current trend is strong and should remain intact. Look for the current trend to continue.

MOMENTUM INDICATORS:

MACD: The MACD is in bearish territory. However, the recent upturn in the difference between the MACD and the MACD signal line may indicate a short term rally over the next few days.

RSI: The 14-Day RSI is in neutral territory. (RSI is at 33.12). This indicator issues bullish signals when the RSI line dips below the oversold zone (currently set at 20.00); a bearish signal is generated when the RSI rises into the overbought zone (currently set at 80.00). Nevertheless with the RSI at 33.12 the market is somewhat oversold, but given the 50-Day new low here, greater oversold levels are likely.

VOLATILITY INDICATORS:

Bollinger Bands (20-Day Average +/-1 Standard Deviation): As prices are closer to the bottom band than the top band, the Bollinger Bands are indicating oversold prices. Volatility also appears to be increasing, as evidenced by a larger distance between the upper and lower bands over the past few sessions. Despite this oversold condition the market may become more oversold before turning higher. As a result, the market will look for additional strength in prices before turning bullish on this indicator.

RESISTANCE AND SUPPORT LEVELS:

1.2961 - Highest High in last 50-Days

1.2897 - 20-Day Simple Moving Average Plus 2 Standard Deviations

1.2817 - Highest High in last 10-Days

1.2803 - 20-Day Simple Moving Average Plus 1 Standard Deviation

1.2768 - 50-Day Simple Moving Average

1.2758 - 100-Day Simple Moving Average

1.2719 - 25-Day Simple Moving Average

1.2642 - 10-Day Simple Moving Average

1.2614 - 20-Day Simple Moving Average Minus 1 Standard Deviation

1.2568 - 3-Day Simple Moving Average

1.2556 - High

1.2550 - Last Price

1.2533 - Low

1.2526 - Lowest Low in last 10-Days

1.2526 - Lowest Low in last 50-Days

1.2520 - 20-Day Simple Moving Average Minus 2 Standard Deviations

1.2511 - 200-Day Simple Moving Average

Japanese Yen:

Japanese Yen futures at the CME are weaker this morning extending the prior sessions weaker close. Trend indicators are indicating a bearish market and the overall strength of the trend is strong, as indicated by the ADX. Momentum readings are also bearish. However, the recent upturn in the difference between the MACD and the MACD signal line may indicate a short term rally over the next few days and should be watched.

TREND INDICATORS:

Simple Moving Average (10-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 10-Day simple moving average has a strong bearish bias.

Simple Moving Average (25-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 25-Day simple moving average has a strong bearish bias.

Simple Moving Average (50-Day): Recent activity this morning has seen prices trade below this moving average. Also, the slope of the moving average is in a downward slope from the previous session indicating further weakness. As a result the 50-Day simple moving average has a strong bearish bias.

ADX: The Average Directional Change (ADX) indicates the strength of a markets underlying trend. A rising ADX is interpreted as building trend strength, while a falling ADX indicates weakness in the underlying trend and the potential of a market reversal. On this market, the 14-Day ADX is rising, while the long term trend, based on a 50-Day moving average, is down. As the ADX is rising this indicates that the current trend is strong and should remain intact. Look for the current trend to continue.

MOMENTUM INDICATORS:

MACD: The MACD is in bearish territory. However, the recent upturn in the difference between the MACD and the MACD signal line may indicate a short term rally over the next few days.

RSI: The 14-Day RSI is in neutral territory. (RSI is at 33.51). This indicator issues bullish signals when the RSI line dips below the oversold zone (currently set at 20.00); a bearish signal is generated when the RSI rises into the overbought zone (currently set at 80.00). Nevertheless with the RSI at 33.51 the market is somewhat oversold. However, this by itself isn't a strong enough indication to signal a trade. Look for additional evidence of strength from this indicator before getting too bullish here.

VOLATILITY INDICATORS:

Bollinger Bands (20-Day Average +/-1 Standard Deviation): As prices are closer to the bottom band than the top band, the Bollinger Bands are indicating oversold prices. Volatility also appears to be increasing, as evidenced by a larger distance between the upper and lower bands over the past few sessions. Despite this oversold condition the market may become more oversold before turning higher. As a result, the market will look for additional strength in prices before turning bullish on this indicator.

RESISTANCE AND SUPPORT LEVELS:

0.8811 - Highest High in last 50-Days

0.8726 - 20-Day Simple Moving Average Plus 2 Standard Deviations

0.8686 - 200-Day Simple Moving Average

0.8684 - 100-Day Simple Moving Average

0.8639 - 20-Day Simple Moving Average Plus 1 Standard Deviation

0.8608 - Highest High in last 10-Days

0.8594 - 50-Day Simple Moving Average

0.8563 - 25-Day Simple Moving Average

0.8484 - 10-Day Simple Moving Average

0.8466 - 20-Day Simple Moving Average Minus 1 Standard Deviation

0.8440 - 3-Day Simple Moving Average

0.8434 - High

0.8432 - Last Price

0.8419 - Low

0.8414 - Lowest Low in last 50-Days

0.8414 - Lowest Low in last 10-Days

0.8380 - 20-Day Simple Moving Average Minus 2 Standard Deviations