The EUR/USD drops like a rock and resumes the Friday’s bearish candle, the greenback has taken the lead and drags the pair down as the US dollar index rebounded. Is trading in the red and approaches a dynamic support line, I want to remind you that the perspective remains bullish despite the current retreat. Price opened with a gap down today and looks determined to hit fresh new lows in the upcoming hours, but remains to see what will happen because the dollar index remains under pressure and could drop anytime again.
The USDX found strong support and now climbed much above the 96.00 psychological level, but remains to see if will have enough energy to increase further, or this was only a normal bounce back after the impressive sell-off. USDX is on a declining path and is located much below a very strong dynamic resistance, personally I still believe that could reach new lows in the upcoming period because I don’t believe that wil start a larger increase right now.
Right now we don’t have a strong reversal sign on the USDX, the behavior needs to change before the index will have the energy to start a broader upside movement.
The Euro decreased also because the Euro-zone failed to impress today, the Spanish Manufacturing PMI dropped from 55.4 to 54.7 points, even if the economists have expected to see an increase to 55.6 points, the Italian Manufacturing PMI surged from 55.1 to 55.1 points in June, but less versus the 55.3 forecast, while the French Final Manufacturing PMI decreased from 55.0 to 54.8 points, signalling that the expansion has slowed down in the manufacturing sector.
The German Final Manufacturing PMI increased from 59.3 to 59.6 points in May, exceeding the 59.3 estimate, while the Italian Monthly Unemployment Rate increased from 11.2% to 11.3%, despite that the specialists have expected to see a drop to 11.1%.
The Euro-zone Final Manufacturing PMI increased from 57.3 to 57.4 points in May, signalling that the expansion continues, moreover the Unemployment Rate remains steady at 9.3% for the second month in May.
The United States data have come in mixed as well in the afternoon, the ISM Manufacturing PMI increased from 54.9 to 57.8 points in June, beating the 55.0 estimate, while the ISM Manufacturing Prices decreased from 60.5 to 55.0 points, much below the 58.5 estimate.
Moreover the Final Manufacturing PMI dropped from 52.1 to 52.0 points, the estimate was 52.1 points, the Construction Spending increased by 0.0%, less versus the 0.3% estimate, remains to see what impact will have the release of the Total Vehicle Sales report.


Price dropped aggressively after the false breakout above the fifth warning line (WL5) of the major descending pitchfork, is challenging the 1.1365 static support and looks determined to reach ad retest the lower median line (lml) of the minor ascending pitchfork. The perspective is bullish as long as the rate is trading within the ascending pitchfork's body and above the first warning line (wl1). We'll have a great selling opportunity if the rate will drop outside the ascending pitchfork's body and if will retest the lower median line (lml) and the WL5. Looks exhausted on the short term after the failure to reach the 50% Fibonacci line (ascending dotted line) and the 1.1466 static resistance, but we still need a confirmation that will start a larger drop.

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