Technical Analysis EUR/USD for November 19, 2015

The EUR/USD moved higher on Thursday as investors took profits and oversold conditions were attractive to purchase the currency pair.  This comes despite rumblings that the ECB is poised for a 20 basis points cut in the deposit rate which pushed the 2-year yields differential between the U.S. and Germany to 125 basis points the highest differential seen in the past 5-years.  The currency pair hit a higher of 1.0763, before retracing back to the 10-day moving average near 1.0731.  Support on the currency pair is now seen near Wednesday’s lows at 1.0630.

Momentum is negative on the currency pair but the MACD (moving average convergence divergence) index is poised to generate a buy signal.  The spread appears to be crossing above the 9-day moving average of the spread while the index moves from negative to positive territory.  The relative strength index moved from oversold to neutral territory pointing to a higher exchange rate.