FX.co ★ Hot forecast for EUR/USD on June 7, 2023

The euro still lost positions after Eurostat released mixed data from the European Union. The report showed that retail sales were unchanged between March and April. They were about 2.6% lower than in the same period in 2022. Although just the day before, the euro had enough minor reasons to experience fairly confident growth. It is also noteworthy that the single currency started to drift lower a couple of hours before the data was published and continued in the same direction after their release. Moreover, there was no data that could have had any impact on the situation. In other words, the corrective movement ended without even starting, and the quotes rolled back to their initial positions.

The dollar is still excessively overbought, and it is unclear when all of this will end. One thing we can say for sure is that some basis, such as major economic data or statements from monetary authorities, is needed for a correction or something similar. And today, European Central Bank officials are scheduled to speak. It is quite possible that they will provide some hints regarding the upcoming board meeting next week, especially if their words can lead to the conclusion of further rate hikes. In this case, the euro can recover its losses from yesterday.

The EUR/USD pair showed a bearish sentiment, despite the fact that the scale of the ongoing corrective move from the high of the medium-term trend is already at 450 pips.

On the four-hour chart, the RSI indicator is moving in the lower area of 30/50, which corresponds to the prevailing sentiment towards short positions.

On the same time frame, the Alligator's MAs are headed downwards, which points to the corresponding direction of the corrective movement.

Outlook

If speculators insist on ignoring the technical signal that shows the dollar's overbought conditions, the current corrective cycle may persist. However, the scale of the euro's weakening indicates the precarious position of sellers. And if the market does not ignore the technical signals, then at least the EUR/USD pair will be flat in the short-term.

The complex indicator analysis unveiled that in the intraday and short-term periods indicates a downward cycle.