Any rumors and speculations need constant support, otherwise, markets quickly forget about them and return to their usual state. That's exactly what we've seen in the past couple of days. On Wednesday, the dollar weakened due to rumors that the Federal Reserve would lower interest rates as early as March 2024. However, this topic did not get any further development yesterday, and the market returned to the levels it was at just before those rumors appeared. Even weak data on US jobless claims, which increased by 26,000 compared to the forecast of 12,000, couldn't stop the corrective movement. Today, the market will likely consolidate around the levels it reached yesterday. The economic calendar is empty, and many markets close early. Traders and investors are more likely to be busy congratulating their colleagues on the upcoming New Year than making any significant trades.
The EUR/USD pair reduced the volume of long positions around the 1.1140 level. As a result, there was a pullback, and the quote returned to the upper area of the psychological level of 1.1000/1.1050.
On the four-hour chart, the pullback phase was confirmed when the RSI downwardly crossed the 70 middle line, indicating a decrease in the volume of long positions.
On the same timeframe, the Alligator's MAs are still headed upwards. This is a residual effect from the uptrend cycle. Considering the current pullback, the MA lines may enter a consolidation phase.
Outlook
In case the pair falls further, the price could reach the 1.1000 level. Take note that the pullback fits within the structure of an uptrend. Therefore, there is no change in trading interests. A temporary pullback or consolidation near the 1.1000 level may serve as a balance of trading forces before a new upward surge.
The complex indicator analysis points to a pullback stage in the short-term and intraday periods. In the medium-term, indicators are reflecting an upward cycle.
