- Yesterday's bearish engulfing pattern suggests selling
EUR/USD extends its drop as the USDX rallies and approaches new highs. The pair has printed a bearish engulfing pattern ending the short-term rebound. Technically, EUR/USD could still develop a larger corrective phase if the US Dollar Index resumes its current growth.
The US Retail Sales and Core Retail Sales are expected to increase by 1.1% in January, the Industrial Production could register a 0.4% growth, while the Capacity Utilization Rate may increase to 74.9%. EUR/USD could register a sharp drop if the United States figures will come in line with expectations or better.
EUR/USD Bearish Engulfing Pattern
EUR/USD failed to reach the R1 (1.2172) and now it is traded below the pivot point of 1.2097. The immediate target is seen at the descending Pitchfork's median line (ML). Dropping and stabilizing below this dynamic support could attract more sellers.
If the price fails to reach the upper median line (UML), it will indicate high selling pressure. Yesterday's bearish engulfing pattern indicated that the short-term swing high is over and that sellers will drive the price down.
Forecast:
Sell EUR/USD if it closes below the S1 (1.2042) and use the S2 (1.1966) and 1.19 levels as downside targets.
