The EUR/USD pair erased the latest gains and was located at 1.0946 at the time of writing. The price crashed as the Dollar Index jumped higher. You knew from my previous analysis that the bias remains bearish. The rate could hit new lows as long as it stays below the downtrend line.
Fundamentally, the US Consumer Credit came in better than expected, while the Eurozone data came in mixed. Today, the German Final CPI rose by 0.3% matching expectations. On the other hand, the US Trade Balance came in at -65.5B versus -65.1B expected, Final Wholesale Inventories reported a 0.5% drop compared to 0.3% drop expected, while IBD/TIPP Economic Optimism was reported at 40.3 points compared to 43.0 estimated.
EUR/USD strong sellers
As you can see on the H1 chart, the rate dropped again after retesting the downtrend line. I've talked about this scenario in my previous analysis. Only a valid breakout through this dynamic resistance and above 1.1047 would have invalidated a larger drop.
Now, the sell-off was paused by the weekly S1 (1.0930). After its sell-off, the rate could try to rebound. The 1.0917 stands as a critical downside obstacle.
EUR/USD outlook
Dropping and closing below 1.0917 is seen as a selling opportunity. This scenario opens the door for a larger drop.
