FX.co ★ Hot forecast for EURUSD on 30/05/2023

After seeing thin volumes on Monday, the dollar started the new day with modest growth. Judging by the overall sentiment, it is expected to rise throughout the day.

Firstly, today the deal is ready to move to Congress for a vote. There will be a vote to raise the debt ceiling, and it will certainly increase, which will be presented by the mass-media as a rescue from an inevitable default. Considering that recently the media has been fueling hysteria around the potential default and its consequences, raising the debt ceiling will be perceived as an incredibly positive factor. They will say that the country avoided a catastrophe and so on.

Secondly, early in the morning, there were reports of drones hitting several buildings in Moscow, causing damage and the sounds of air defense systems operating were heard in the city. There are no casualties. In any case, this is a clear increase in tension and escalation of the conflict in the European region.

As a result, the following picture emerges - an increase in tension, particularly of a military nature, in Europe, while the United States managed to avoid a default at the last moment. Therefore, investors will undoubtedly attempt to transfer some of their funds from Europe to America, which will contribute to the strengthening of the dollar.

After a brief stagnation, the EUR/USD pair has retreated. The exchange rate is staying below the 1.0700 level, which serves as a technical signal for an increase in short positions on the euro.

On the four-hour chart, the RSI is once again heading towards the oversold zone, and traders are ignoring this signal. In shorter time periods, the RSI is already below the 30 mark.

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

Outlook

In this situation, we are dealing with a certain momentum, which has prolonged the corrective cycle. If traders continue to ignore the oversold signal, the exchange rate could continue to fall towards the subsequent support area around 1.0500/1.0550.

As for the bullish scenario, traders are considering this as a technical retracement, which would reduce the volume of short positions.

The comprehensive indicator analysis in the short-term and intraday periods points to a downward cycle.