The EUR/USD pair crashed today and now is located at 1.0667 at the time of writing. The bias was bearish despite temporary rebounds. You knew from my previous analyses that a larger rebound needs strong confirmation. The price failed to confirm a new leg higher, so more declines are expected.
Surprisingly, the ECB increased the Main Refinancing Rate by 25 bps, while the US retail sales data, PPI, and Unemployment Claims came in better than expected. This situation forced the pair to drop deeper.
EUR/USD Distribution Violated!
From the technical point of view, the rate ignored the lower median line (lml) and the 1.0685 former low indicating more declines. You knew from my previous analysis that only a valid breakout above 1.0759 would have confirmed a larger rebound.
The current breakdown confirmed the range as a downside continuation formation. Still, after its massive drop, the rate could come back to test and retest the broken levels before extending the sell-off.
EUR/USD Forecast!
The 1.0655 low represents a key support. A new lower low, a bearish closure below this level activates more declines. Also, testing and retesting the 1.0685 or the lower median line (lml) should bring us new shorts as well.
