A correction in the market has been brewing for a while. All this time, the market was looking for any excuse to start the corrective move up. The release of preliminary Q4 GDP in the eurozone became such a reason. The figure came well above market expectations. Last Friday, it was expected that the eurozone economy would slow down to 2.8% versus 3.9%. By the opening of the North American session, the forecast was upwardly revised to 4.2%. The actual preliminary result shows a 4.6% increase in Q4 GDP, beating market expectations. Consequently, the euro went up.
Eurozone GDP:
Today, data on the labor market will be released in the eurozone. The report will unlikely somehow affect the market as the unemployment rate should stay firm at the same level. However, unemployment may drop to 7.1% versus 7.2%. If so, the single European currency will grow and the upward correction will extend.
Eurozone unemployment:
Disappointing macroeconomic results are also expected in the United States where the number of job openings is forecast to tumble by 42,000, which is a negative factor. At the same time, it could hardly be perceived as a significant drop since the reading should decrease to 10,520,000 versus 10,562,000 in the previous month. Moreover, the state of the labor market continues to improve. Therefore, it is obvious why the number of job openings is falling - it reflects a rise in employment. All in all, this is going to be an insignificant decline that could hardly affect the market.
United States Jobs Openings:
The euro/dollar pair is retracing up after the bear run last week. The euro has strengthened by 120 pips from the swing low of 1.1121.
The Relative Strength Index (RSI) is moving up in the range between 50 and 70, confirming a corrective stage in the market.
The Alligator indicator on the H4 chart has a crossover of the MAs, which reflects a decrease in bearish sentiment. On the daily chart, the indicator is still signaling the continuation of the bearish trend in the market.
On the daily chart, we can see the continuation of the bearish trend that emerged in June 2021. Traders returned to the June 2020 levels. So, the global bearish trend goes on despite the current correction.
Outlook:
The upward correction is still relevant but it may end soon. When buying the instruments, traders should prepared for a decrease in the volume of long positions, which could lead to the resumption of the bearish trend.
As for complex indicator analysis, there is a signal to buy the instrument in the short term and intraday due to an upward correction. In the intermediate term, the continuation of the bearish trend signals to sell the pair.