Last Friday, the market banally ignored the final data on inflation in the euro area, which completely coincided with the preliminary estimate. That is, it is now officially confirmed that the growth rate of consumer prices has accelerated from 2.2% to 3.0%. But in general, the market should not have reacted to this news in any way, since it had already taken it into account at the time of the release of the preliminary assessment. So the euro actually stood still for the entire first half of the day, showing only extremely uncertain attempts at growth. However, just before the opening of the US trading session, the European Commission published a report on the fullness of gas storage facilities. Almost immediately, the euro rushed down. It turns out that the storage facilities are only 70% full, which is about 20% less than the average for the last ten years. In other words, Europe is still not ready for the heating season. That is, the energy crisis is far from over. This means that new price records are waiting for us. At the same time, there are already real consequences of this whole story for the real sector of the economy. However, so far only in the UK. But it is quite obvious that this is not far off in the euro area either. In any case, economic growth is likely to be replaced by a recession, which of course scares investors. And apparently, the topic of energy will continue to be decisive. Moreover, the macroeconomic calendar is absolutely empty today and tomorrow, and there is simply nothing else to focus on.
During the inertial downward movement, the euro lost about 0.5% last Friday. This led to the prolongation of the recovery course relative to the correction in the period from August 23 to September 3.
Against the background of a sharp price change, the technical indicator RSI entered the oversold zone, below the 30 line. After that, there was a slight stagnation in the downward cycle.
Based on the daily period, there is a recovery in the dollar rate by about 81% relative to the correction.
Expectations and prospects:
In this situation, there is a local oversold of the European currency, which can lead to a technical rollback. At the same time, the downward interest persists among market participants, this may contribute to a decline towards 1.1664.
Comprehensive indicator analysis gives a sell signal based on short-term, intraday and medium-term periods due to the rapid recovery of dollar positions.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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