Despite the stronger-than-expected eurozone PMI data, the market did very little during the trading session on Thursday. This is not surprising, given the US holiday. Without American traders, market activity comes to a standstill. American markets are open today, but it will still be a shortened trading session. However, it is quite possible that the volatility may gradually increase, as preliminary readings of business activity indexes will be published in the United States. Unlike Europe, forecasts for US are quite negative. The manufacturing index should remain unchanged, but the services index may decrease from 50.6 points to 50.5 points, causing the composite index to decrease from 50.7 points to 50.6 points. Whereas in Europe, PMIs were rising. So the dollar may have a formal reason to fall on Friday. However, given the nature of the trading day, the amount of changes will still be limited.
In an attempt to recover from a recent decline, the EUR/USD pair returned to the level around 1.0900, where it became stagnant.
On the 4-hour chart, the RSI technical indicator is hovering around the 50 mid line, indicating stagnation. At the same time, it is worth noting that the indicator preferably moves in the upper area of 50/70, which may indicate a persistent bullish sentiment among market participants.
On the same chart, according to the Alligator indicator, two out of three MA lines are intertwined. This is a potential signal of stagnation as it signifies that the trend is too weak.
OutlookIn this situation, keeping the price above the level of 1.0900 may indicate an increase in the volume of long positions on the euro, which could lead to testing the local high of the upward cycle in the future.
The bearish scenario will come into play in case the price settles below 1.0850. This move will extend the corrective cycle.
The comprehensive indicator analysis in the short-term points to stagnation. In the daily period, the upward sentiment is still in force.