Not only did the final GDP data for the United States turn out noticeably better than preliminary estimates, showing that if the US economy is heading towards a recession, it is doing so in a sluggish manner, but the labor market data also exceeded expectations. Both initial and continued claims were expected to show growth, albeit only marginally. However, in reality, the figures decreased. This resulted in the dollar’s growth immediately after the release of this data. However, by the end of the day, the market remained essentially unchanged, as the dollar had been actively depreciating before that. There were no grounds for such behavior unless we consider the forecasts based on the latest economic data. But then the dollar should not only have recovered these losses but also continued to rise.
Apparently, the market is being held back by today’s eurozone inflation report. According to forecasts, the preliminary estimate should show a slowdown in the pace of consumer price growth from 6.1% to 5.6%. Further decline in inflation could compel the European Central Bank to adopt a more cautious policy, limiting the potential for further interest rate hikes. Most likely, the interest rate disparity will remain in favor of the Federal Reserve. Such thoughts, which will undoubtedly cross the minds of investors after the data release, work against the euro, which is likely to lose its positions significantly. However, everything will depend on the published data, as they may not align with the forecasts.
The EUR/USD pair, in a downward movement, returned to the lower band of the corrective cycle. This indicates that the bearish sentiment remained in force.
On the four-hour chart, the RSI indicator is moving in the lower area of 30/50, indicating an increase in the volume of short positions.
On the same time frame, the Alligator’s MA’s are still heading down, which aligns with the direction of the corrective cycle.
Outlook
In this case, keeping the price below 1.0845 would prolong the corrective movement, potentially paving the way towards 1.0800. However, due to the strong news flow, market speculations may arise.
The comprehensive indicator analysis in the short-term and intraday periods points to a corrective cycle.
The material has been provided by InstaForex Company – www.instaforex.com
Not only did the final GDP data for the United States turn out noticeably better than preliminary estimates, showing that if the US economy is heading towards a recession, it is doing so in a sluggish manner, but the labor market data also exceeded expectations. Both initial and continued claims were expected to show growth, albeit only marginally. However, in reality, the figures decreased. This resulted in the dollar’s growth immediately after the release of this data. However, by the end of the day, the market remained essentially unchanged, as the dollar had been actively depreciating before that. There were no grounds for such behavior unless we consider the forecasts based on the latest economic data. But then the dollar should not only have recovered these losses but also continued to rise.
Apparently, the market is being held back by today’s eurozone inflation report. According to forecasts, the preliminary estimate should show a slowdown in the pace of consumer price growth from 6.1% to 5.6%. Further decline in inflation could compel the European Central Bank to adopt a more cautious policy, limiting the potential for further interest rate hikes. Most likely, the interest rate disparity will remain in favor of the Federal Reserve. Such thoughts, which will undoubtedly cross the minds of investors after the data release, work against the euro, which is likely to lose its positions significantly. However, everything will depend on the published data, as they may not align with the forecasts.
The EUR/USD pair, in a downward movement, returned to the lower band of the corrective cycle. This indicates that the bearish sentiment remained in force.
On the four-hour chart, the RSI indicator is moving in the lower area of 30/50, indicating an increase in the volume of short positions.
On the same time frame, the Alligator’s MA’s are still heading down, which aligns with the direction of the corrective cycle.
Outlook
In this case, keeping the price below 1.0845 would prolong the corrective movement, potentially paving the way towards 1.0800. However, due to the strong news flow, market speculations may arise.
The comprehensive indicator analysis in the short-term and intraday periods points to a corrective cycle.
The material has been provided by InstaForex Company – www.instaforex.com
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