FxWirePro: Leading indicators lead Euro’s collapse – mammoth volumes confirm bear trend

Euro has been collapsing from the peaks of May 2014, slid almost more than 88.6% Fibonacci levels from the recent bottoms.

Although we could notice some stability was seen from April'15 but still there is no significant strength in recovery to reach at least 23.6% price gains despite all attempts by euro area leaders if you've to speak fundamental perspectives.

The pair has now slipped below strong support zone at 1.0730 with huge volume build ups (grey shaded areas), but last month it has taken support at 1.0562 to jump which we think unlikely to hold.

RSI (14) is in clear convergence with declining prices which is again a weak signal (Currently, RSI trending at 29.5502 while articulating). This indicator has touched oversold territory but no trace of bulls alert.

This leading oscillator has started evaluating when the prices touched 1.0885 by taking the computation of last 14 weeks periods the magnitude of recent gains to recent losses in an attempt to signify the too much overbought signals from then.

On other hand no signs of buying interest while tracing out %D crossover on slow stochastic curve even below 20 levels which means selling pressure is justifiable (Currently, %D line at 10.0874, while %K line at 6.1272).

Stochastic curve also enters into the oversold territory but proper trace of %K crossover that signifies weakness in the euro.

Hence, we still project 1.0525 for end - 2015, a cyclical low of 1.05 in Q1 2016 can also not be disregarded, and a slow uptick from there to 1.11 by June 2016 and 1.13 by Q3 2016.

Fundamentally, all eyes on ECB tomorrow, while the USD index has recouped post payroll claims and optimistic hints from Yellen.