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07.02.202409:10 Forex Analysis & Reviews: Hot forecast for EUR/USD on February 7, 2024

Eurozone retail sales figures slumped, which suggests that there is a high risk of the European economy sliding into a recession. However, there are some questions regarding a price rebound that started immediately after the US trading session opened. The reason is that although the pace of decline accelerated from -0.4% to -0.8%, the forecasts were for figures to accelerate from -1.1% to -1.3%. In other words, the latest data turned out much better than the forecasts. Moreover, the previous data was revised upwards. Although the corrective movement could have been somewhat more significant, it's also important to remember that the latest report suggests a deterioration in the eurozone's economic situation. That had some restraining influence. Nevertheless, the dollar is still overbought, and it seems that the pair will continue to rebound, albeit gradually. Especially since the economic calendar is quiet until the end of the week. That is unless we receive unexpected news that are capable of influencing the situation. The market will gradually correct the imbalances that have formed.

Exchange Rates 07.02.2024 analysis

EUR/USD has corrected higher, reducing the volume of short positions near the local low set in December 2023. As a result, there was a pullback, which means that the euro has partially pared losses relative to the recent decline.

On the four-hour chart, the RSI indicator is moving in the lower area of 30/50, indicating the prevailing bearish sentiment.

On the same time frame, the Alligator's MAs are headed downwards, corresponding to the current cycle.

Outlook

If the ongoing retracement lingers in the market, the pair may return to the level of 1.0800, which it previously reached. The bearish scenario will come into play if the price settles below the level of 1.0700. In this case, we may see a subsequent increase in the volume of short positions, intensifying the process of weakening the euro's exchange rate.

In terms of complex indicator analysis, the price is retracing up in the short term. Indicators still show a bearish bias intraday.

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

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