Not only do economic reports hinder the long-awaited correction, but they also exacerbate the dollar's overbought condition. This time, it's about durable goods orders, which were expected to fall by 1.4%. But surprisingly they actually grew by 0.2%. As a result, the downward momentum continues for the euro.
Despite the fact that the dollar is excessively overbought, it has become clear that the market needs a good reason to start a corrective phase. It's not just possible to pluck it out of thin air. Therefore, the most likely scenario is some sort of stagnation. Today, the only report worth eyeing on is the initial jobless claims in the United States. However, the changes are likely to be purely symbolic. For instance, the number of initial claims may increase by 4,000, while the number of continuing claims is expected to decrease by 2,000. These changes are so insignificant that they will have no impact. There is no point in considering the final GDP data for the United States, as it is already expected to confirm the preliminary estimates that have already been factored into the market.
The EUR/USD pair has reached the support level of 1.0500. As a result, we witnessed a decrease in selling volumes, but speculative bearish sentiment persists among market participants.
On the four-hour and daily charts, the RSI shows a signal of the euro's oversold conditions.
On the four-hour chart, the Alligator's MAs are pointing downward, in line with the main cycle's direction.
Outlook
Keeping the price below the support level of 1.0500 may further weaken the euro despite technical signals of its oversold conditions. In this case, the current movement will persist in the market for some time.
As for the bullish scenario, traders will consider it as a technical rebound. The support level of 1.0500 may serve as a reference point.
Complex indicator analysis indicates a bearish signal in the short-, mid- and long-term timeframes.
