Increased geopolitical risks in late February triggered a mass inflow of capital to the United States. In this light, the euro plunged versus the dollar. The geopolitical situation in Ukraine has not changed for several days and further tightening of the mutual sanctions regime is not expected. At the same time, many fears and concerns have not materialized. In general, the situation has somewhat stabilized and risks have decreased. Against this backdrop, the euro was supposed to increase. However, instead, it has been descending since the end of last week. Apparently, it is about the outcome of the last FOMC meeting. It took market participants more than 24 hours to apprehend the fact that the Federal Reserve had announced the largest monetary tightening in the decades. As soon as they got the picture, the greenback began to appreciate. If the fundamental background remains the same today, the trend will only deepen.
Having broken through the psychological level of 1.1000, EUR/USD accelerated its downtrend, which indicates increased bearish bias and may also lead to the end of the corrective move.
The Relative Strength Index is moving down in the range between line 50 and line 30 in the H4 chart, confirming bearish bias.
The Alligator indicator signals the end of the two-day corrective move in the H4 time frame as its moving averages have crossed over. In the daily time frame, the Alligator still indicates the downtrend in the medium term as there has been no crossover of the moving averages.
Outlook:
The dollar will be able to recoup its recent losses if the price consolidates below 1.1000. If so, the euro may go down to 1.0900-1.0800.
Alternatively, if the quote rises above 1.1050, the downtrend will slow down.
In terms of complex indicator analysis, there is a sell signal for short-term and intraday trading amid the strengthening of the dollar. Indicators are also signaling to sell the instrument in the medium term due to the general downtrend.