The EUR/USD pair plunged as the Dollar Index has extended its growth. The hawkish FOMC boosted the US dollar. The pair is trading at 1.1141 level right above the 1.1132 today's low. After the current sell-off, a temporary rebound is favored. A bounce-back could bring new selling opportunities.
Fundamentally, the Euro resumed its depreciation even if the German Gfk Consumer Climate was reported at -6.7 points versus -7.9 expected, while the Spanish Unemployment Rate dropped from 14.6% to 13.3% far below 14.2% expected.
On the other hand, the US data came in mixed. The Advance GDP reported a 6.9% growth beating the 5.3% estimates, while the Advance GDP Price Index rose by 6.9% exceeding the 6.0% forecasts. In addition, the Unemployment Claims and the Core Durable Goods Orders came in line with expectations. The Pending Home Sales and the Durable Goods Orders came in worse than expected.
EUR/USD Above Dynamic Support!
As you already know from my analyses, EUR/USD was expected to drop deeper if it closes below the 1.1273 level. The pair retested the uptrend line confirming its breakdown from the up channel's body.
The ascending channel represented a bearish pattern. Now, the EUR/USD pair stands right above the first warning line (wl1) of the descending pitchfork which could represent dynamic support, a downside obstacle.
EUR/USD Outlook!
After the current sell-off, a temporary rebound is in cards. Still, the bias is bearish, so EUR/USD could drop deeper anytime. 1.11 psychological level is seen as a potential target. A valid breakdown below the warning line (wl1) may signal a deeper drop. Right now, it's risky to sell it even if the bias is bearish. Only a temporary rebound towards 1.1186 former low could bring great selling opportunities.
