The EUR/USD pair drops like a rock in the short term as the Dollar Index has managed to resume its swing higher. The bias is bearish, so the currency pair could approach and reach new lows.
Fundamentally, the pair drops even if the NFP and the ISM Manufacturing PMI reported worse than expected data on Friday. Still, the Unemployment Rate dropped unexpectedly lower from 3.8% to 3.6% below 3.7% expected, while the Average Hourly Earnings rose by 0.4% matching expectations.
Today, the US Factory Orders reported a 0.5% drop, while the Euro-zone data came in mixed.
EUR/USD Strong Sell-Off!
As you can see on the H4 chart, the EUR/USD pair extended its drop after closing below the ascending pitchfork's lower median line (LML). Now, it has ignored the 1.1 psychological level signaling strong sellers and more declines.
Technically, the next downside target is represented by the 1.0944 former low. Still, don't forget that after its massive drop, we cannot exclude a temporary rebound.
EUR/USD Outlook!
Breaking below the lower median line (LML) signaled more declines. A larger downside movement, a downside continuation will be confirmed if the rate makes a valid breakdown below 1.0944. This scenario could bring new short opportunities. Right now, it's too late to go short as the rate is almost to hit 1.0944 downside obstacle/
Also, a temporary rebound, coming back to test and retest the 1.1 or 1.1050 level could bring short opportunities as well.
