The greenback is clearly overbought, which is confirmed by the chart. It has been posting losses since the opening of the Asian session yesterday. The market came to a standstill. That was due to a decrease in industrial production in the eurozone to -1.4% versus 2%, missing market expectations of a 1.1% increase. In this light, no correction occurred.
Eurozone Industrial Production:
Nevertheless, a correction is still needed. In the European session, the market will likely be in a flat trend. The second estimate for Q1 GDP in the eurozone will hardly affect prices as it should come in line with the first estimate and has already been priced in. Meanwhile, US macro data will likely trigger a fall in the greenback. Retail sales are estimated to drop to 1.4% from 2.9% and industrial production to fall to 0.3% versus 0.5%, indicating a looming recession.
United States Retail Sales:
The trading week kicked off with a rebound. The euro strengthened against the dollar by approximately 45 pips. The selling pressure is still high. Otherwise, the euro would show a steeper increase.
The RSI has left the oversold zone on the 4-hour chart but still remains in the range between 30 and 50, signaling increased selling pressure.
The Alligator moving averages are headed down in the 4-hour chart, confirming a corrective cycle from the peak of the medium-term trend.
Outlook
The price will likely continue offsetting losses after consolidation above 1.0900. Otherwise, the corrective move will resume, and the quote will reach a new sing low.
In terms of complex indicator analysis, the price is retracing up in the short term. Indicators also show a corrective move intraday.
