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Prior to the release of the US inflation data, the euro was actively rising, but as soon as it was announced that the pace of consumer price growth had accelerated from 3.0% to 3.2%, the quotes returned to their initial position. Although the final result was slightly above the forecast at 3.1%. In theory, the euro should have fallen even more. However, shortly before that, the market convinced itself that inflation would accelerate to 3.3%. So, in the end, the data turned out to be slightly below expectations. Nevertheless, the report still showed growth, which means that the Federal Reserve could raise rates once again. We can expect at least one more rate hike, not necessarily in the aftermath of the next meeting, but by the end of the year.
And possibly more than one. Today, the US will release its Producer Price Index data, and the growth rates are likely to accelerate from 0.1% to 0.7%. In other words, inflation will likely rise. This leaves the Fed with no other choice but to further tighten its monetary policy. Naturally, this will make the dollar stronger.
Due to the news flow, the EUR/USD pair temporarily deviated from the course of the current momentum. The exchange rate jumped above 1.1060, but buyers were unable to maintain the new values. As a result, the pair retreated below the 1.1000 level.
On the four-hour chart, the RSI technical indicator is moving within the 50 middle line. This points to a standstill.
On the same chart, the Alligator's MAs confirms the flat phase with multiple intersections.
Traders will consider the bearish scenario if the price stays below the 1.0900 level. This will prolong the corrective cycle.
The bullish scenario will be relevant once the exchange rate stays above the 1.1050 level. In this case, this could involve a step-by-step process of the euro's recovery, which can result in ending the corrective movement.
The complex indicator analysis unveiled that in the short-term period, indicators are pointing to the recent downward move. In the intraday period, indicators point to an alternate signal due to the sideways move.
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