The EUR/USD pair turned to the upside today as the US Dollar Index crashed after the US economic figures were publushed. As you already know, the eurozone services and manufacturing figures came in mixed.
Still, the pair reacted and registered a sharp movement only after the release of US services and manufacturing PMI data. The US Flash Services PMI dropped unexpectedly from 47.3 points to 44.1 points even though traders expected a potential growth to 49.8 points. Th Flash Manufacturing PMI came in at 51.3 points below 51.8 points expected.
EUR/USD Rallied On Poor US Data
As you can see on the H4 chart, EUR/USD dropped to as much as 0.9899 and was trading at 0.9974 after failing to stay around today's high of 1.0017. The current rebound could be only a temporary one.
The rate could come back to test and retest the immediate resistance level before dropping deeper. As long as it stays under the downtrend line, the bias remains bearish. After its massive drop, a bounce back was natural.
EUR/USD Forecast
Testing and retesting the 0.9999 - 1.0000 area and registering only false breakouts could announce a new sell-off in the short term. Also, testing and retesting the downtrend line could bring new short opportunities.
Still, a larger downside movement could be activated only by a new lower low if the rate drops and closes below 0.9899.
