EUR/USD extends its sell-off after retesting the 1.17 psychological level. USDX's up reversal should force the pair to approach and reach new lows. The price is strongly bearish, so a deeper drop is expected.
The eurozone and US manufacturing data could attract more sellers today. Technically, EUR/USD should resume its bearish momentum. 1.1611 is seen as an immediate downside target.
Still, you should be careful these days as the US Presidential Election, FOMC Meeting, NFP, and the services data could bring high volatility and sharp movements.
EUR/USD Downside Validated
EUR/USD approaches the 1.1611 former low, a valid breakdown through this static support validates further drop. Its failure to re-test the Pivot Point (1.1715) level signals high selling pressure.
The S1 (1.1570) and the second warning line (wl2) are seen as downside targets as well. However, a larger drop will be signaled only by a valid breakdown under the S2 (1.1495) static support.
- EUR/USD Trading Tips
The 1.17 retest followed by the drop under 1.1648 suggests selling with a potential target at the S1 (1.1570). The bearish bias remains intact as long as the pair stays under the third warning line (wl3).
A new lower low and the bearish closure under the 1.1611 level should indicate an extended downside movement. I believe that the bearish scenario could be invalidated only by a breakout above the 1.19 psychological level.
