Monday, November 2, 2015
Today is the first trading day after most of the United States has set their clocks back and returned to standard time. It's also a rare occasion when Xpresso will look at the Euro currency futures market and not have to focus on Greece, as the latest in the ongoing series of Greek sovereign debt crises was finally resolved this summer.
Euro currency futures are one of the more complex products to trade. 19 countries with wildly varying political and economic structures use the Euro as their currency. There have been several macroeconomic events affecting the Euro in 2015 besides the events in Greece. The lower price of Crude Oil is seen as a benefit to the Euro countries, and economic growth was a modest 0.4% in the second quarter of 2015. The quantitative easing program also has kept the Euro lower, which helps exports. Euro bears will be looking to see if there is any fallout from the Volkswagen emissions story. The ongoing migrant crisis also may lead to political pressure on some of the Euro states. Finally, the slowdown in China may also reduce the demand for German exports.
Turning to the 3-month continuation chart, we see the bears in control right now. The Euro has been trading below both the 20- and 50-day Simple Moving Averages (SMA), and the slope of the 20-day SMA has turned downward, preparing to cross below the 50-day SMA. The 14-day Relative Strength Index shows oversold at a bearish 27.55.
Dale Jennings, Commodity Analyst