FX.co ★ Hot forecast for EURUSD on 24/05/2023

While PMIs in Europe turned out worse than forecasted, the situation was quite the opposite in the United States. Only the manufacturing index decreased from 50.2 points to 48.5 points, while estimates were for it to rise to 50.3 points. On the other hand, the service sector, instead of declining from 53.6 points to 53.0 points, jumped to 55.1 points. As a result, the composite PMI was able to increase from 53.4 points to 54.5 points. Overall, it turned out to be quite an amusing situation - all the PMIs that were expected to rise had fallen, while those predicted to decline showed growth instead. And this was not only the case in the United States but also in Europe. The only thing that was surprising was the euro's relatively modest decline. However, it is important to take note of the single currency's excessive oversold condition, which limits its potential for further decline.

The volume of short positions fell around last week's low. As a result, the EUR/USD pair rebounded, indicating the possibility of a slowdown in the euro's downward cycle.

On the four-hour chart, the RSI is moving in the lower area of the indicator, which may indicate a persistent bearish sentiment.

On the same time frame, the Alligator's MAs are headed downwards, confirming the corrective movement.

Outlook

The current rebound may push the pair above the 1.0800 level, but this wouldn't be a crucial change. The main signal for an increase in long positions will emerge once the price stays above the 1.0850 level. Until then, we can't rule out the scenario of the pair trading around the 1.0750/1.0850 range.

A comprehensive analysis of indicators in the short-term and intraday periods points to growth due to the ongoing price rebound in the market.