The EUR/USD pair dropped as much as 1.0665 today where it has found demand again. Now, it's trading at 1.0680 and is fighting hard to rebound. DXY's temporary retreat after its rally could help the pair to increase a little.
Fundamentally, the USD appreciated in the short term after the US CPI and Core CPI came in line with expectations. Also, the traders expected positive US retail sales data today. The Retail Sales indicator rose by 3.0% beating the 1.9%, Core Retail Sales surged by 2.3% exceeding the 0.9% growth forecasted, while Empire State Manufacturing Index came in at -5.8 points versus -18.2 points expected.
Still, unfortunately for the USD, Capacity Utilization Rate and Industrial Production came worse than expected.
EUR/USD Hovers Above Support!
You knew from my previous analysis that the EUR/USD pair is trapped between 1.0669 and 1.0790 in the short term. Escaping from this pattern should bring new opportunities.
After its strong drop, a temporary rebound is natural. 1.0669 and the median line (ml) represent critical downside obstacles.
EUR/USD Outlook!
Dropping and closing below today's low of 1.0665 activates more declines and brings new selling opportunities. The S1 of 1.0630 is seen as the first downside target. The lower median line (lml) stands as a major target if the rate continues to drop.
