The EUR/USD pair plunged in the short term as the US dollar index has managed to resume its upwards movement. As we know from my previous analysis, the price could approach and reach new lows after failing to stay above strong levels. It was traded at the 1.0035 level at the time of writing and it seems very heavy.
Fundamnentally, Germany's PPI rose by 5.3% versus 0.7% expected, while the Current Account was reported at 4.2B above -3.3B estimated. In the short term, the Canadian retail sales data had an impact on USD. Still, as you already know, USD rallied as the Philly Fed Manufacturing PMI, Unemployment Claims, and the Cb Leading Index came in better than expected.
EUR/USD moving towards new lows
I've told you in my previous analysis that the EUR/USD pair could drop deeper after dropping and closing below 1.0119. The bias is bearish, and temporary rebounds could bring new selling opportunities.
The price ignored the S2 (1.0050) as well, so more declines are on the cards. Still, in the short term, we cannot exclude a temporary rebound, so the rate could come back to test and retest the S2.
EUR/USD Outlook
Testing and retesting the S2 (1.0050), making only false breakout above this level, and dropping below today's low of 1.0032 may activate more declines towards the 1.0000 (parity) level and down to the lower median line (lml).
