The EUR/USD pair is trading in the green at 1.0871 at the time of writing. The bias remains bearish in the short term despite minor rebounds. You knew from my previous analysis that the currency pair could extend its sell-off as the Dollar Index is bullish after positive US data reported during the week.
In the short term, the currency pair tries to recover after yesterday's massive drop. Fundamentally, the USD received a helping hand from the US Final GDP which reported a 2.0% growth beating the 1.4% growth estimated, and from the Unemployment Claims indicator which came in at 239K versus 264 estimated.
Today, the economic data could bring some volatility. The Eurozone is to release the CPI Flash Estimate and Core CPI Flash Estimate, while the US is to release the Core PCE Price Index, Revised UoM Consumer Sentiment, Chicago PMI, Personal Income, and Personal Spending. Positive US data should help the greenback to resume its appreciation.
EUR/USD Retesting The Sellers!
From the technical point of view, the EUR/USD pair validated its breakdown below 1.0887 and now it has stabilized below the median line (ml). Yesterday's low of 1.0860 represents a downside obstacle.
After its massive drop, the rate could try to test and retest the median line (ml) before extending the sell-off.
EUR/USD Outlook!
Staying below the median line (ml) and making a bearish closure below 1.0860 activates more declines. This is seen as a selling signal with a potential target at the weekly S1 (1.0820).
