The EUR/USD pair drops as the Dollar Index has managed to come back higher after its minor retreat. In the short term, the currency pair tried to rebound and recover after its strong drop. Still, the buyers failed to keep the rate above the 1.0900 psychological level signaling that the sellers are very strong.
Fundamentally, the Euro received a helping hand from the Eurozone data today. The ZEW Economic sentiment was reported at -43.0 above -46.5 expected, while the German ZEW Economic Sentiment came in at -41.0 points versus -48.4 forecasts.
On the other hand, the US inflation figures came in mixed. The CPI rose by 1.2% matching expectations, while the Core CPI reported a 0.3% growth versus a 0.5% growth estimated. The pair drops as the DXY maintains a bullish bias, the FED is expected to hike rates in the upcoming meetings.
EUR/USD Under Massive Pressure!
EUR/USD rebounded but it has registered only a false breakout with great separation through the weekly pivot point of 1.0920 signaling strong sellers. Today, it has retested the 1.0900 psychological level being rejected.
It has failed to stabilize above the 1.0874 level. The bearish engulfing confirmed strong downside pressure. A new lower low, closing below 1.0836 could confirm a deeper drop. The next downside target is represented by the 1.0805 lower low.
After its failure to make a new higher high, EUR/USD could extend its drop. Still, it remains to see how it will react around 1.0805. A valid breakdown may confirm downside continuation, while false breakdowns could signal that the sell-off could be over.
EUR/USD Forecast!
Dropping and stabilizing below 1.0805 could confirm more declines. The 1.09 retest was seen as a selling opportunity. 1.0874 retest could bring new short opportunities.
Only a major bullish reversal pattern on 1.0805, a false breakdown with great separation could signal a strong rebound.
