The currency pair has accelerated its drop and now is trading right below the 1.0884 static support. EUR/USD has decreased despite the oversold signals and now is pressuring a critical dynamic support. A valid breakdown will open the door for more drops.
EUR/USD has resumed the downside movement as the US Dollar Index has managed to jump way higher. USDX is trading at the 99.00 psychological level, a further increase will force the USD to drag the pair below 1.0865 low.
EUR/USD has reached the second warning line (WL2) of the ascending pitchfork as expected. I've said that the price will continue to drop as long as it is located below the median line (ml) of the descending pitchfork.
The next downside target is seen at the lower median line (lml) of the descending pitchfork. It is very important to see how the price will react in the upcoming hours. You can notice that the WL1 has represented a very strong dynamic support in the past, it has rejected the price.
A false breakdown with a great separation, a pin bar, could signal that the downside movement is completed and a potential upside movement could develop. Meanwhile, a valid breakdown below the WL2 will signal that EUR/USD will resume the downside movement.
- Trading Tips
Right now, it will be better to stay away from the market because we don't have a great trading opportunity. A long opportunity could appear only after a reversal pattern from this support zone, while a bearish signal could be confirmed if the price stabilizes below the 1.0884 static support and below the WL2.
You should know that if the price fails to reach the lower median line (lml), EUR/USD is expected to retest the median line (ml). So, another rejection or false breakout above the median line (ml) could give us a great chance to go short again.
