EUR/USD is trading in the red at 1.2221 and it could drop deeper if the US Dollar Index resumes its rebound. The pair has escaped from a short-term ascending channel signaling a potential corrective phase.
Today, the US data will definitely shake the markets. The Non-Farm Employment Change is expected at 60K jobs, lower versus 245K in November, the Average Hourly Earnings may increase by 0.2%, while the Unemployment Rate could increase from 6.7% to 6.8%.
On the other hand, the Eurozone Unemployment Rate could increase from 8.4% to 8.5% adding more selling pressure on EUR/USD.
EUR/USD Signs Of A Peak!
EUR/USD has shown overbought signs lately but it wasn't enough for us to consider going short. I've told you in a previous analysis that the price could activate a sell-off, corrective phase if it drops and stabilizes under 1.2214 former low, static support.
As you can see on the H4 chart, the price is challenging this critical support level. Closing under it could signal further decline. Still, you should keep in mind that the price will be moved by the fundamental factors, so anything could happen after the US data.
Forecast!
Sell a new false breakout above 1.23 or a bearish below 1.22 psychological level. The 1.21 and 1.20 could be used as downside targets.
Closing and stabilizing above the 1.23 level could signal further growth.
