The EUR/USD plunges aggressively right now and looks unstoppable on the short term, the dollar is dragging the price down as the dollar index has started an impressive rally. Price has failed to stay above two dynamic resistance levels, signalling that the buyers are exhausted, so a further drop on the short term is favored.
The pair has erased the last week’s impressive gains, personally I’m waiting for a fresh trading signal, we could have a selling opportunity if the rate will come back to test a dynamic resistance level, we had a false breakout above this level, so a retest will confirm this resistance.
The greenback dominates the currency market as the USDX has finally managed to jump above the 99.12 static resistance (support has turned into resistance), now is located above the 99.50 psychological level, signalling a further increase in the upcoming period. A further USDX’s growth will send the dollar much higher versus its rivals, looks like that the index has formed a Falling Wedge pattern, has found strong support again at the downside line of the potential chart pattern and now could close the former gap down.
The European currency has dropped significantly versus the greenback as the Euro-zone data have come in mixed, the Italian Retail Sales increased by 0.0% in March, less versus the 0.2% estimate, while the French GOV Budget Balance dropped further, from -21.5B to -29.6B. Moreover the German Trade Balance has disappointed a little as the surplus has dropped from 21.2B to 19.6B, even if the traders have expected to see the indicator steady at 21.2B, while the German Industrial Production dropped by 0.4%, less versus the 0.6% estimate, but wasn’t enough to save the Euro from the downside.
The United States data have come in mixed as well, the dollar has received a helping hand from the JOLTS Job Openings, which have increased from 5.68M to 5.74M, beating the 5.67M forecast, while the NFIB Small Business Index has dropped from 104.7 to 104.5 points, the estimate was 104.0 points. The Final Wholesale Inventories rose by 0.2%, despite that the traders have expected to see a 0.1% drop, this wasn’t good for the USD, moreover the IBD/TIPP Economic Optimism dropped from 51.7 to 51.3 points, even if the traders have expected to see an increase to 52.3 points.

EURUSDdaily

Price has extended the yesterday's sell-off and now looks unstoppable, could drop much deeper if the dollar index will resume the current rally. Technically could drop further after the false breakout above the second warning line (WL2) of the former descending pitchfork and after the failure to stabilize above the upside line of the potential Rising Wedge pattern. We'll have a selling opportunity if the rate will come back to test and retest the warning line (WL2), a larger drop will come only if the Rising Wedge will be confirmed.

EURUSDh4

Should drop further after the failure to reach the lower median line (lml) of the ascending pitchfork, the next downside target will be at the first warning line (wl1) of the minor ascending pitchfork, personally I would like the rate to come back to retest the WL2, a retest will bring us a great selling opportunity.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.