EUR/USD is trading deep in the seller's territory and it could approach the next downside targets at 1.0925 and lower at 1.0884 level. The US dollar has driven the pair as the USDX has managed to reach new highs. A further USDX's growth will signal a EUR/USD drop in the upcoming days.
Unfortunately, the US Unemployment Rate and the Average Hourly Earnings disappointed on Friday, but the unexpected NFP data has maintained the EUR/USD lower. The US has created 225K jobs in January, beating the 165K expectations and the 147K jobs reported in December.
EUR/USD is trading at 1.0950 according to the H4 chart, the outlook is bearish as long as the price is trading below the median line (ml) of the descending pitchfork. The price has tested the broken 250% Fibonacci line, the next downside target is seen at 1.0925 level.
I've said in my analysis that a drop below the 1.1 psychological level and below the 250% line will signal a larger drop. The price could be attracted also by the second warning line (WL2) of the previous ascending pitchfork and by the lower median line (lml) of the descending pitchfork.
- Trading Tips
It is not advised to go short on EUR/USD at this moment, we had a short opportunity after the aggressive breakdown below the median line (ml) and below the 250% line. However, a median line (ml) retest and rejection, or a failure to retest this dynamic resistance could bring another short opportunity.
As I've said, the major downside target could be at the 1.0884 level, the price is somehow expected to reach the WL2 and the lower median line (lml). USDX maintains a bullish bias, so a further increase will send the EUR/USD pair towards the mentioned targets.
