The EUR/USD pair crashed today as the Dollar Index has managed to rebound. You knew from my analyses that the DXY maintains a bullish bias despite temporary retreats. The price was located at 0.9909 far above today's low of 0.9863.
The rate tries to test and retest the near-term resistance levels before going down. Fundamentally, the German Factory Orders registered a 1.1% versus the 0.8% drop expected. On the other hand, the US data came in mixed. The Final Services PMI came in at 43.7 points versus the 44.3 points expected. Still, the USD received a helping hand from the ISM Services PMI which represented a high-impact event. The indicator came in at 56.9 points versus the 55.4 expected. As you already know, the ECB could really shake the markets on Thursday.
EUR/USD Strong Downside Pressure!
Technically, the currency pair closed the gap down but it found resistance at 0.9980 and now it has crashed again. The price failed to retest the downtrend line signaling strong downside pressure.
It has dropped again below the 0.9899 static support but the weekly S1 (0.9880) stopped the sell-off. As long as it stays under the downtrend line, the bias remains bearish.
EUR/USD Forecast!
A valid breakdown below the S1 (0.9880) and a bearish closure below 0.9863 activates more declines and could bring short opportunities. The S2 (0.9810) stands as a potential downside target and obstacle.
