The EUR/USD pair was plunging at the time of writing as the Dollar Index (DXY) rallied. As you already know from my analysis, we have a strong negative correlation between the DXY and EUR/USD. The index has escaped from a symmetrical triangle announcing potential upside continuation. This scenario could signal that the currency pair could extend its downside movement.
The pair is traded at 1.1264 far below 1.1323 today's high. In the short term, it continues to move sideways, that's why we have to wait for confirmation before deciding to go short. The bias is bearish, so more declines are in cards.
Fundamentally, the euro received a hit from the Eurozone Industrial Production which reported a 1.1% growth versus 1.2% expected. On the other hand, the USD was boosted by the US economic data. The PPI registered a 0.8% growth beating the 0.5% estimates, while the Core PPI rose by 0.7% more compared to 0.4% expected by specialists.
EUR/USD massive sell-off
As you can see on the H4 chart, the pair failed once again to reach and retest the downtrend line signaling strong sellers. Also, its false breakout above 1.13 psychological level announced a potential sell-off.
EUR/USD could pressure the immediate downside obstacles soon after failing to stabilize above the 23.6% retracement level. A valid breakdown below the Ascending Pitchfork's lower median line (lml) may signal a downside continuation.
EUR/USD outlook
A new lower low, a bearish closure below the 1.1227 level could open the door for a deeper drop at least towards 1.1186 lower low. This could represent also a selling opportunity. A larger downside movement could be activated only by a valid breakdown below 1.1186.
