By and large, we must admit that everything that happened on Friday is a demonstration of an excessive speculative component. After all, the dollar was growing even against the background of extremely weak macroeconomic data for the United States. That is, if more recently the market ignored European statistics, and the U.S. acted as a driving force, then on Friday, it was already ignored.
But the growth rate of retail sales in the United States slowed from 18.2% to 16.9%. With a forecast of 17.0%. On a monthly basis, everything looks even worse, as sales decreased by 1.9%. And this is for December, when sales traditionally grow due to Christmas and New Year sales.
Thus, consumer activity in the United States has gone down, the main locomotive of the U.S. economy. In addition, the growth rate of industrial production, which was supposed to accelerate from 5.3% to 5.4%, slowed down from 5.0% to 3.7%.
That is, not only the previous data was revised for the worse, but also the data itself turned out to be noticeably worse than forecasts. Nevertheless, the dollar continued to grow. And this illogical behavior of the market is somewhat alarming since the speculative component can push it both in one direction and in the other.
Moreover, it is extremely difficult to predict these movements. If at all possible. Apparently, this situation will persist until the middle of next week, on the meeting of the Board of the Federal Reserve System.
If we talk about today, then due to the weekend in the United States, the market will be marking time. This is supported by the fact that during the previous week all movements took place either before the opening of the American trading session or after that. So there is practically no activity on the market without American traders.
Retail Sales (United States):
The EURUSD currency pair, after an intensive upward movement, switched to correction mode, returning the quote to the previously passed value of 1.1400. Based on the price behavior, there is an interaction with the level of 1.1400, where market participants consider it as support.
The RSI technical instrument left the overbought zone in the four-hour period, falling down to the average level of 50. Thus, the local overheating of the euro exchange rate was removed from the market.
From the point of view of the Alligator indicator, there is an attempt to change trading interests. This signal is confirmed by holding the MA lines above 1.1400.
There is no trend reversal on the daily chart, instead, the seven-week flat has been replaced by a correction against the downward trend.
Expectations and prospects:
In this situation, much will depend on the level of 1.1400, since holding the price above it may well lead to a subsequent upward move. However, if we proceed from the medium-term perspectives, the downward trend is still relevant, which means that holding the price below 1.1370 in the daily period will resume the downward cycle in the market.
Comprehensive indicator analysis gives a variable signal based on the short-term and intraday periods due to price stagnation within the level of 1.1400. Technical indicators in the medium term point to a downward trend, signaling a sale.
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