The EUR/USD has decreased sharply today as the US dollar index has rebounded and have recovered after yesterday’s massive drop, the USD remains under pressure as the USDX could resume the downward movement after the short rebound. The rate has decreased also because the rate has touched a dynamic resistance, which has rejected the price on the short term, the price is seeking for strong support before will start another leg higher, could decrease to retest the 1.1123 horizontal support before the buyers will take full control gain.
The Spanish Services PMI has decreased from 56.0 points to 54.1 points, much below the 55.1 estimate, is signaling that the services sector expansion is slowing down, the French Final Services PMI has increased to 50.5, showing that the expansion continues, while the German Final Services PMI has decreased from 54.6 to 54.4 points, the poor data have punished the Euro, which has decreased versus all its counterparts. The Euro has received a helping hand from the Italian Services sector continues the expansion, while the European Final Services PMI has increased from 52.7 to 52.9 points, have exceeded the 52.8 estimate.
The USD has edged higher after the release of the ADP Non-Farm Employment Change, the economic indicator has increased unexpectedly, has reached the 179K jobs in July, have come above the 176K in June and have beaten the 171K estimate. The Final Services PMI has increased to 51.4, signaling that the expansion continues. Unfortunately the USD has received a blow from the ISM Non-Manufacturing PMI, the indicator has decreased from 56.5 to 55.5 points, has come below the 56.0 prediction, the greenback has increased even if the data indicator has disappointed.

The price has plunged today, has decreased below yesterday’s low from 1.1156 level and is expected to test the confluence area formed at the intersection of the 1.1123 level with the median line of the short descending pitchfork, the price is attracted by this confluence area and any drop below this confluence area will open the door for more declines, but a rejection from the confluence area will send the rate higher again, the major target remains at the major confluence formed at the intersection of the lower median line of the major ascending pitchfork with the upper median line of the short descending pitchfork and with the minor median line of the short ascending pitchfork. The short retreat was expected because the price has failed to close above the median line of the minor ascending pitchfork, the rate could retest the lower median line of the short ascending pitchfork before will resume the upward movement. However, a drop below the median line of the descending pitchfork followed by a retest will attract more sellers, right now everything depends on the USDX, because another drop will send the USD lower again.

You can see that the price is decreasing aggressively, but remains to see what will happen when the rate will touch the median line (ML) of the descending pitchfork and the 1.1123 static support.

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