EUR/USD has increased a little in the short term but the pressure is high and it could drop anytime again. It has retested the channel's downside line as the Dollar Index has slipped lower after failing to break out the 93.43 static resistance.
The euro has also managed to increase today because the German PPI was reported better than expected. The economic indicator rose by 1.5% beating the 0.8% growth expected. The FOMC meeting is seen as the main event of this week. The Fed is expected to keep its monetary policy unchanged. Still, this high-impact event could bring high volatility and sharp movements.
EUR/USD further decline in cards
EUR/USD maintains bearish bias despite the current rebound. It may only test and retest the immediate upside obstacles before dropping deeper. The pair is trapped between 1.1908 and 1.1663 levels.
An aggressive breakout through the confluence area formed at the intersection between the warning line (wl1) with the downside line announced a larger downwards movement. A new lower low, a bearish closure below 1.1700 may announce a potential decline towards the 1.1635 lower low.
Forecast
The current rebound could help us to catch a new bearish movement. Personally, I'll look for new selling opportunities when this rebound is over. EUR/USD may still drop as long as it stays below the warning line (wl1) and under the weekly pivot point (1.1765).
The level of 1.1663 represents a major downside target if the rate resumes its sell-off.
