EUR/USD is trading in the red at 1.1677 level above today's low of 1.1668. It could resume its drop if the Dollar Index jumps higher. DXY has finally managed to make a new higher high after ignoring the 93.43 static resistance. An upside continuation may force the EUR/USD pair to drop deeper.
The pair dropped deeper only because the Dollar Index has reached fresh new highs. Fundamentally, the German Gfk Consumer Climate was reported at 0.3 points above -1.6 points expected.
On the contrary, the US CB Consumer Confidence, Goods Trade Balance, HPI, and the Prelim Wholesale Inventories have come in worse than expected. Despite these poor figures, USD dominates the currency market as traders are expecting the FED to take action in the near future.
EUR/USD above critical support
EUR/USD failed to stabilize above the weekly pivot point (1.1719) signaling strong selling pressure. As I've mentioned in my previous analysis, the price could drop anytime as long as it stays under the downtrend line.
Also, a failure to reach and retest the downtrend line signaled a deeper drop. The pair has plunged below the second warning line (wl2) which was seen as a dynamic support. Now it has dropped below 1.1684 S1 and is about to stabilize below it.
Still, the 1.1663 stands as a critical and major support, downside obstacle. A bullish pattern printed on this level could signal a rebound.
EUR/USD forecast
Making a valid break below the 1.1663 could really activate a broader downside movement towards 1.6 and 1.5 psychological levels.
