The EUR/USD has decreased today and has resumed the yesterday’s bearish candle, has reached new lows today, but remains to see what will happen in the coming hours because the rate has touched a major static support and now has squeezed a little as the US dollar index has retreated a little after the impressive rally.
The pair has decreased as the USDX has managed to jump above the 101.78 previous high and was almost to reach the 102.00 psychological level, but has found temporary resistance at the 101.98 level. The greenback has decreased a little in the last hours as the United States economic data have come in mixed.
The Personal Spending has increased only by 0.2% in January, less versus the 0.3% estimate, has increased less also compared to the 0.5% growth in December 2016, the Personal Income surged by 0.4% in January, beating the 0.3% estimate and the 0.3% growth since December. The Final Manufacturing PMI decreased from 54.3 to 54.2 points, despite that the traders have expected to see an increase to 54.4 points, the Core PCE Price Index rose by 0.3%, matching expectations.
The Construction Spending has decreased by 1.0% in January and has weakened the greenback, the traders had expected to see a 0.7% growth, the indicator has decreased sharply after the 0.1% growth from the previous reporting period, while the ISM Manufacturing Prices have fallen from 69.0 to 68.0 points, more versus the 68.5 estimate.
The greenback has received support, only from the ISM Manufacturing PMI, which has increased from 56.0 to 57.7 points, exceeding the 56.2 estimate, the US is also expected to release the Total Vechicle Sales, which are expected to increase from 17.6M to 17.7M, remains to see how the rate will react after this publication, but I don’t believe that will have a major impact.

On the other hand, the Euro has lost significant ground as the German Unemployment Change has come in better than the economists estimate, was reported at -14K, lower versus to the -10K forecast, the Italian Manufacturing PMI rose from 53.0 to 55.0 points, beating the 53.6 estimate, signalling that the expansion continues in the manufacturing sector. The German Prelim CPI rose by 0.6%, matching expectations, we had also many poor figures today, the Spanish Manufacturing PMI has fallen from 55.6 to 54.8 points, even if the traders have expected to see an increase to 55.9 points, the German Final Manufacturing PMI decreased to 56.8 points, signalling that the expansion has slowed, while the Euro-zone Final Manufacturing PMI was reported at 55.4, lower versus the 55.5 estimate.

The rate has decreased, but has found support again above the 1.0521 static support, remains to see what will happen in the coming hours, because a break below this level, followed by a retest will open the door for more declines. However a rejection from here will send the rate towards the upper median line (UML) of the major descending pitchfork, the perspective remains bearish as long as the rate is trading inside the descending pitchfork's body. Looks like that the rate has developed an inverse Head and Shoulders pattern, but this potential pattern needs to be confirmed, could be validated only if the rate will escape from the descending pitchfork's body.

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