EUR/USD registered sharp movements in both directions today. Still, the bias remains bearish as the Dollar Index maintains a bullish outlook despite poor US economic data reported today.
Fundamentally, the euro received a helping hand from the German Unemployment Claims and from the German Retail Sales. The economic indicators reported better than expected figures, but unfortunately, EUR/USD failed to develop a new leg higher. On the contrary, the pair stays near the 1.1272 today's low even though the US data disappointed earlier.
The ISM Manufacturing PMI dropped unexpectedly lower from 61.1 to 58.7 below 60.0 expected, while the JOLTS Job openings dropped from 11.09M to 10.56M far below 11.06M estimates.
EUR/USD Upside Was Invalidated!
EUR/USD registered only a fasle breakout above the 1.1374 static resistance invalidating an upside reversal. Now, it has stabilized below the 23.6% retracement level and under the weekly S1 (1.1309).
Today, it has registered a false breakout with great separation above the 1.1300 psychological level. As long as it stays under this level, EUR/USD could extend its downside movement towards 1.1235 static support.
EUR/USD Outlook!
A new lower low, dropping and closing below 1.1273 could activate more declines. After its failure to validate its breakout above 1.1374, a potential drop towards 1.1235 is favored. A larger downside movement could be announced by a valid breakdown below 1.1235.
