In general, everything fell into place, and it's clear that the market went through a kind of preparation for the European Central Bank's meeting. After the ECB left everything unchanged, and Lagarde didn't provide any new information, the single currency seemed to freeze in its tracks. In other words, investors were preparing for this outcome, and they had been working on it for three days. What's surprising is that the preparation began so early. Usually, this kind of activity happens just a day before events like a central bank meeting. Let's see, maybe this is a new trend now, as the Federal Open Market Committee's meeting is scheduled for Wednesday, and it's entirely possible that the markets will be set in motion as early as Monday. For now, though, the market is at a standstill, and it's likely that this situation will persist until the end of the day. This is not surprising, as the market needs to catch its breath after a three-day marathon.
The EUR/USD pair has reached the support level at 1.0500 during its downward movement. The volume of short positions decreased around this level. As a result, this led to a rebound, and the euro partially recovered its value relative to the recent decline.
On the four-hour chart, the RSI indicator is moving in the lower area of 30/50, indicating that the bearish sentiment remains in force despite the ongoing retracement.
On the same time frame, the Alligator's MAs are headed downwards, aligning with the pair's primary direction. However, it's worth noting that indicators may sometimes lag in signaling a price reversal. For this reason, the indicators suggest a bearish interest, even while the price is in a retracement phase.
OutlookIn theory, the ongoing retracement could lead the price back to the level of 1.0600, ultimately allowing for a sideways move between the values of 1.0500/1.0600. However, if the ongoing retracement slows down, and the price settles below the 1.0550 mark, there's a high chance that the pair will breach the 1.0500 level and fall.
The complex indicator analysis points to a retracement phase in the short-term period. In the intraday period, technical indicators are pointing to bearish sentiment.