Yesterday, the euro dropped by 76 pips on rising volumes, as the S&P 500 fell by 0.28%. Market participants paid closer attention to Jerome Powell's remarks and realized there would be no two rate cuts by year-end. Investors, out of inertia, kept October cut expectations high (97.4%), but reduced the probability for December from 81.3% to 72.5%. US Treasury yields increased slightly.
Today, data will be released on August durable goods orders (forecast: -0.3%), the final Q2 GDP estimate (expected unchanged at 3.3% y/y), weekly jobless claims (expected up from 231k to 233k), and the core personal consumption expenditures price index for Q2 (forecast 2.5% versus 3.5% previously). It appears that these prints are unlikely to reverse a market already sliding into crisis correlation.
A key support for the euro is the daily MACD line (1.1717). A close below this level could trigger a medium-term decline in the euro. The downside target is 1.1605. Beyond that, the next target could be 1.1495 (the June 5 high).
The Marlin oscillator's signal line has approached the boundary of the bearish zone, but has not yet crossed it. The situation is developing where both price and oscillator may move below their respective supports simultaneously—but this would require a bit more consolidation.
On the four-hour chart, the overall situation is bearish, as price trades below the indicator lines and the Marlin oscillator stays in negative territory. However, the oscillator is slightly rising, which sets the stage for consolidation. Markets await this evening's US data.
