EUR/USD drops like a rock and it seems heavy enough to approach and reach fresh new lows. The pair extends its downside movement as the Dollar Index has managed to reach fresh new highs.
As you already know from my analysis, the USD was boosted after the US retail sales data was reported better than expected in yesterday's session. Today, the US Prelim UoM Consumer Sentiment failed to reach 71.9 estimates. Still, it was reported at 71.0 higher versus 70.3 in the previous reporting period.
Euro lost significant ground even if the Final CPI and Core CPI have come in line with expectations. The Current Account was reported at 21.6B below 22.3B forecast and compared to 21.8B in the last reporting period.
EUR/USD Breakdown In Play!
EUR/USD is traded at 1.1727 level below the channel's downside line and under the first warning line (wl1) of the ascending pitchfork. It has closed below the confluence area formed at the intersection between these two obstacles signaling further drop.
Technically, a valid breakdown through a confluence area indicates further decline. Stabilizing below these broken levels could bring new short opportunities.
Outlook!
EUR/USD registered a breakdown through a confluence area which is seen as a bearish signal. It could resume its sell-off if it stays under these levels. The next downside target is seen at the weekly S3 (1.1693). 1.1663 lower low is seen as a downside target as well.
