The EUR/USD pair plunged after failing to make a new higher or to reach the 1.14 psychological level. The DXY's strong rally forced the USD to appreciate versus all its rivals. In the short term, the bias is bearish, the pair could extend its sell-off anytime if the Dollar Index resumes its growth.
As you already know, the Euro-zone and German Flash Manufacturing PMI and Flash Services PMI came in mixed yesterday. Later, the German ifo Business Climate is expected at 96.4 points versus 95.7 in the previous reporting period.
You have to be careful as the US economic data could bring high volatility and sharp movements. The CB Consumer Confidence may drop from 113.8 to 109.9, while the Flash Services PMI and Flash Manufacturing PMI could rise, announcing an expansion.
EUR/USD Downside Activated!
EUR/USD found resistance right below the 50% Fibonacci line of the sideways pitchfork. Now, it challenges the median line (ML) which stands as a dynamic support. As you can see on the h4 chart, the price escaped from a triangle pattern signaling potential downside movement.
In my opinion, a new lower low, dropping and closing below 1.1279 could activate more declines. Staying above this level and above the median line (ML) could announce that the rate could move sideways in the short term.
EUR/USD Prediction!
EUR/USD could drop deeper if it stabilizes below the weekly pivot point of 1.1331 and if it makes a new lower low. Personally, I would like if the rate comes back to test and retest the broken uptrend line before making a valid breakdown below the 1.1279. A valid breakdown through this level may bring new short opportunities.
