On Tuesday, the euro extended its downward movement in the first half of the trading day, afterward, it retraced to the levels seen at the beginning of the trading session. At this time, there were several economic reports that had completely opposite implications. Although the reports were of secondary importance, the direction of the pair's movement contradicted the logic of the data. For instance, wage growth rates in the Eurozone slowed from 5.2% to 3.1%, which is obviously not encouraging. On the other hand, the US data turned out to be great. For instance, the number of building permits issued increased by 1.9%, and overall housing starts soared by 10.7%. In theory, the dollar should have strengthened in response to these reports.

But apparently, it might be necessary to disregard all the macro data altogether, as the market is clearly focused on today's Federal Open Market Committee meeting. Especially since the dollar started to show weakness after new forecasts were announced, or rather speculations, regarding its outcome. Currently, there is much speculation around whether Fed Chair Jerome Powell will specify not only the timing but also the pace of the upcoming interest rate cuts. However, expecting specific details from Powell is like expecting heavy rainfall in the desert. Hence, market participants will likely be disappointed. And this could serve as a catalyst for fueling the dollar's growth.

The EUR/USD pair has been in a corrective phase for the second consecutive week since it reached a local peak in the upward cycle. There are no crucial changes observed at this stage, and trading interests have not shifted either.

The RSI has reached the oversold zone on the 4-hour chart, indicating that the instrument may be due for a price correction.

The Alligator moving averages are headed down on the same chart, corresponding to the direction of the corrective cycle.

Outlook

In this situation, the main factor that affects the exchange rate will be the outcome of the FOMC meeting. From a technical perspective, the level of 1.0800 serves as a support level, where we observed a periodic decrease in the volume of short positions, leading to a price rebound. However, in case the price settles below this mark during the day, the volume of short positions may increase despite oversold signals.

In terms of the complex indicator analysis, we see that in the short-term period, technical indicators are pointing to a bounce. Meanwhile, in the intraday and mid-term periods, the indicators are reflecting the corrective cycle.