For three consecutive days, we have witnessed significant movements in the market that can’t be explained through logic. The dollar suddenly strengthened even before preliminary flash readings on business activity indices were published on Tuesday. Yesterday, the greenback continued to advance in the absence of news and economic releases. It appears that all of this was a massive buildup to today’s European Central Bank meeting. Although it’s hard to believe because it lasted for an unusually long time. Typically, such preparations take place just a day before such a significant event. However, if after the ECB leaves the rate unchanged, and ECB President Christine Lagarde announces an indefinite pause, the market will stand still, then yes, all of this was in preparation for the ECB’s meeting. This is the outcome that the market is expecting. If, on the other hand, for the past three days, the market has simply been under the control of speculators, with no anticipation of upcoming results or speeches, then the dollar will continue to rise. Moreover, it could move sharply higher. In this case, the scale of its growth could be comparable to what we observed on Tuesday.
The EUR/USD pair settled below the 1.0600 level, it accumulated a volume of short positions, thereby extending the downward cycle.
On the four-hour chart, the RSI indicator is moving in the lower area of 30/50, indicating an increase in selling volumes.
On the same time frame, the Alligator’s MAs are headed downwards, aligning with the price direction.
Outlook
Under current market conditions, the euro may fall towards the 1.0500 level. This mark could signify a potential end to the corrective cycle. However, traders also view this level as a support, citing a bounce that occurred on October 13. Therefore, in order to support the bearish scenario, the price needs to stay below the control level. In this case, we can confirm the signal for the end of the corrective cycle.
The complex indicator analysis points to a bearish trend in the short-term and intraday periods.
The material has been provided by InstaForex Company – www.instaforex.com
For three consecutive days, we have witnessed significant movements in the market that can’t be explained through logic. The dollar suddenly strengthened even before preliminary flash readings on business activity indices were published on Tuesday. Yesterday, the greenback continued to advance in the absence of news and economic releases. It appears that all of this was a massive buildup to today’s European Central Bank meeting. Although it’s hard to believe because it lasted for an unusually long time. Typically, such preparations take place just a day before such a significant event. However, if after the ECB leaves the rate unchanged, and ECB President Christine Lagarde announces an indefinite pause, the market will stand still, then yes, all of this was in preparation for the ECB’s meeting. This is the outcome that the market is expecting. If, on the other hand, for the past three days, the market has simply been under the control of speculators, with no anticipation of upcoming results or speeches, then the dollar will continue to rise. Moreover, it could move sharply higher. In this case, the scale of its growth could be comparable to what we observed on Tuesday.
The EUR/USD pair settled below the 1.0600 level, it accumulated a volume of short positions, thereby extending the downward cycle.
On the four-hour chart, the RSI indicator is moving in the lower area of 30/50, indicating an increase in selling volumes.
On the same time frame, the Alligator’s MAs are headed downwards, aligning with the price direction.
Outlook
Under current market conditions, the euro may fall towards the 1.0500 level. This mark could signify a potential end to the corrective cycle. However, traders also view this level as a support, citing a bounce that occurred on October 13. Therefore, in order to support the bearish scenario, the price needs to stay below the control level. In this case, we can confirm the signal for the end of the corrective cycle.
The complex indicator analysis points to a bearish trend in the short-term and intraday periods.
The material has been provided by InstaForex Company – www.instaforex.com
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