Inflation in the eurozone didn't just slow down; the decline was much more substantial than even the boldest forecasts, falling from 5.2% to 4.3%, while projections were at 4.7%. This suggests that the European Central Bank has likely reached the end of the tightening cycle. It appears that the first rate cut could happen as early as the first quarter of 2024. As a result, the euro immediately fell. Although the decline was not considerably excessive, it was still quite noticeable.

Most likely, the downward movement will persist due to labor market pressures. The eurozone unemployment rate is expected to rise from 6.4% to 6.5%. The single currency will gradually return to the lows it reached last Thursday.

The EUR/USD pair has entered a corrective phase after reaching the support level of 1.0500. As a result, the euro exchange rate strengthened by about 1%, which is approximately 100 pips. However, the euro fell as the bulls eventually lost steam, and the volume of short positions increased around the 1.0600 level.

On the four-hour chart, the RSI fell below the 50 middle line, thus reflecting bearish sentiment among traders.

Meanwhile, the recent correction caused the Alligator's MAs to be intertwined in the 4-hour chart, signaling a slowing of the downtrend.

Outlook

Keeping the price below the 1.0550 level could lead to a breakthrough of the 1.0500 support level. This may extend the downtrend. However, if the price climbs above the 1.0600 mark, this could revive the ongoing corrective phase, leading to an increase in the volume of long positions in the euro.

In terms of complex indicator analysis, a downward move is likely in the short term, while there is a residual signal of a corrective move in the intraday period.