EUR/USD
Yesterday's outcome was both unexpected and alarming. There are even initial signs of an impending crisis in the correlations. Although, perhaps, this is just a one-time reaction to yesterday's eurozone inflation data; the core CPI decreased from 4.2% YoY to 3.6% YoY, and the overall CPI fell from 2.9% YoY to 2.4% YoY, with expectations at 2.7% YoY. In the United States, the Personal Consumption Expenditures (PCE) Price Index also decreased from 3.4% YoY to 3.0% YoY. Now investors are factoring in a fivefold rate cut in the coming year for both the European Central Bank and the Federal Reserve. While the S&P 500 and Dow Jones closed the day higher, the Nasdaq declined by 0.23%. This morning, the Nikkei 225 and S&P/ASX200 prefer to follow a negative vector, decreasing by 0.15% and 0.41%, respectively. The Chinese index China A50 is down by 0.61%. Even this indicates market concern— the November estimate of South Korea's trade balance increased by $3.8 billion against an expected $1.3 billion, and the S&P PMI increased from 49.8 to 50.0, while the Kospi SEU stock index is losing about 1%.
Tonight, FOMC members Goolsby, Cook, and Fed Chair Powell will speak. Perhaps they will touch on yesterday's events. Also, the U.S. will publish the November Manufacturing PMI from ISM – the forecast is 47.6 against 46.7 in October. Let's see if there will be an unpleasant surprise.
On the daily chart, the price has dropped below the support level of 1.0905 and beneath the embedded line of the green price channel. Divergence with the Marlin oscillator has formed rapidly and is technically stable. There is a possibility of the price falling to the support level of 1.0834, where Fibonacci retracement and the price channel line intersect. If the price consolidates below them, it confirms the price's intention for a medium-term decline. The bearish scenario will be canceled if the price rises above 1.0946. At the moment, things are still uncertain, and we are still waiting for clarification.
On the 4-hour chart, the price has settled below the balance and MACD indicator lines, and the Marlin oscillator is in a downward position. Here, too, the price is shrouded with uncertainty, as it develops precisely at the level of 1.0905, with other strong levels above and below. A decline below yesterday's low opens the possibility of an attack on 1.0834 (the low of July 6th).