The single European currency continued to lose its positions during the entire European trading session, and only by the opening of the US session did the first hints of a possible rebound appear, which seemed to have already been decided. However, it never happened. Instead, the euro froze in place, and is still showing horizontal movement. The completion of a local rebound was prevented by the first estimate of the United States GDP for the fourth quarter, which exceeded all the wildest expectations. Judging by everything, the economic growth rate at the end of last year amounted to 5.7%. Given that the economy sank by -3.4% in 2020, the United States has not only recovered from the effects of the coronavirus pandemic, but even surpassed the performance of 2019. It's like no one was expecting it. And after such data, it would be logical to expect further growth of the dollar. However, the market stood still. It's all about the excessive local overbought of the US currency. In other words, the data on GDP only postponed the implementation of a local correction. Given the fact that the macroeconomic calendar is completely empty, a rebound could happen today.
Change in GDP (United States):
The EURUSD currency pair has overcome the local low of 2021 during an intensive downward move. As a result, a signal was received about the prolongation of the medium-term downtrend, and the quote was at the levels of June 2020.
The RSI technical instrument entered the oversold zone in a four-hour period, dropping down to the level of 18.09. This signal indicates a high chance of a technical pullback in the market. The last time the RSI level 18 was observed in this area was back in November 2021.
The Alligator indicator (D1) confirms the prolongation of the downward trend by the direction of the moving MA lines.
Expectations and prospects:
Due to the high level of euro oversold, the emergence of a technical rollback in the direction of 1.1200 on the market is not ruled out. In this situation, this will not be a signal of the end of the downward trend, but will only play in favor of the regrouping of trading forces.
A subsequent burst of bear activity is expected after the price stays below 1.1130.
Comprehensive indicator analysis gives a variable signal based on the short-term and intraday periods due to price stagnation. Technical indicators in the medium term point to a downtrend, giving a sell signal.
*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.
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