The EUR/USD pair rallied in the short term as the Dollar Index was in a corrective phase. Now, the DXY ended its drop and now it has rebounded and recovered forcing the USD to appreciate versus its rivals. DXY's growth pushed the EUR/USD pair to the downside.
Fundamentally, the greenback was somehow expected to appreciate after Pending Home Sales, Durable Goods Orders and Core Durable Goods Orders came in better than expected in the last trading session. Today, the US data came in mixed. Goods Trade Balance, Prelim Wholesale Inventories, and the HPI reported better than expected data.
Unfortunately for the USD, the CB Consumer Confidence dropped unexpectedly lower from 103.2 to 98.7 points, below 100.0 expected, that's why the USD has depreciated a little in the last two hours.
EUR/USD New Sell-Off!
The EUR/USD pair tested and retested the 1.0582 - 1.0601 area. It has registered only false breakouts above this level signaling exhausted buyers and a new sell-off. You knew from my analyses that the pair could develop a new downside movement as long as it stays below the broken uptrend line and under the resistance area.
Personally, I've drawn a descending pitchfork hoping that I'll catch a new drop. The false breakout with great separation above the upper median line (uml) followed by an aggressive breakdown below the 1.0570 immediate low represented a first short opportunity.
EUR/USD Outlook!
EUR/USD plunged but it has found temporary support at 1.0514. It has registered only a false breakdown through this static support. A temporary rebound could help the sellers to cath a new sell-off, to sell it from the highs.
A valid breakdown below the 1.0514 and a new lower low, a bearish closure below 1.0503 today's low could activate more declines at least towards the S1 (1.0480) and down to the median line (ml). This scenario could bring a new selling opportunity. A broader downside movement could be validated by a valid breakdown below the descending pitchfork's median line (ml).
