The single European currency was declining throughout the trading day. At first, this was nothing more than a banal rebound after the previous rapid growth. But then this trend was reinforced and strengthened by unexpectedly good employment data in the United States. Firstly, the previous data was revised upwards from 132,000 to 185,000. Secondly, employment increased by 208,000, while the forecast was 135,000. It seems that the US labor market does not intend to lose momentum and continues to grow. Which, of course, is an extremely positive factor contributing to the further strengthening of the dollar.
Employment change (United States):
And today, the dollar may continue to strengthen its positions. This time at the expense of European statistics. The rate of decline in retail sales in the euro area should accelerate from -0.9% to -2.2%. And this is nothing but a drop in consumer activity, which is the locomotive of the economy. Consequently, the European economy is steadily sliding into recession, which may well turn out to be quite deep, and most importantly, prolonged. Naturally, against this background, the dollar looks much more attractive than the euro.
Retail Sales (Europe):
The EURUSD currency pair has completed the construction of a corrective move in the area of the parity level. As a result, there was a rebound in the price, which returned the quote to the previously passed level of 0.9850. Now this level plays the role of support in the market.
The RSI H4 technical instrument crossed the 70 line from top to bottom during the price rebound from the parity level. This signal indicated the possibility of strengthening short positions at the time of the price rebound. Upon reaching the price level of 0.9850, the indicator moved closer to the average line of 50, which corresponds to the signal of a slowdown pullback. A stable finding of the indicator within 50/70 may indicate the resumption of the upward cycle.
The moving MA lines on the Alligator H4 have changed direction from bottom to top, which also corresponds to a corrective move. Alligator D1 is directed downwards, ignoring the correction move at this stage.
Expectations and prospects
In order for the downward move from the parity level to continue forming, the quote needs to stay below 0.9850 in a four-hour period. This step will open the way for bears in the direction of 0.9750. The absence of price retention below the reference value allows the occurrence of a 0.9850/1.0000 range in the market. In this case, the current corrective move can continue to form.
A comprehensive indicator analysis in the short term indicates a price rebound from the 0.9850 level, signaling a long position. Indicators in the intraday period have a variable signal due to the fact that the price is still at the conditional peak of the corrective course.
