The EURUSD currency pair reacted precisely as predicted yesterday. The level of 1.0990 proved to be a strong resistance, leading to a decline to the anticipated buying point at 1.0940, after which it experienced a rebound of almost 40 pips. The current price action appears somewhat neutral, leaning towards bullish, while the overall trend remains upward.
The pair's downward movement was triggered by higher-than-expected CPI data, suggesting that the USD is unlikely to see a rate cut. Interestingly, despite this, the entire downward move was reversed, contrasting with indices which also retraced their losses but were halted near the 78% Fibonacci retracement level. Looking ahead to today's expectations, the scenario is somewhat uncertain.
Considering both indices and foreign exchange markets, if a sell-off were to occur, it would likely happen around the 78% Fibonacci level. For the forex market, this could mean forming a double top pattern followed by a downturn. However, this outcome isn't clearly indicated at the moment. Weighing the possibilities, it feels like a 60-40 split, with a slight inclination towards the 60% likelihood of the market moving upwards.