EUR/USD dropped significantly and resumed the Friday’s bearish candle. It looks determined to drop towards fresh new lows in the upcoming period. Price has retested an important level in the last week and now should drop much deeper as the USDX is expected to climb much higher as well in the upcoming period. The dollar index increased and resumed the Friday’s bullish candle, signaling that the bulls could take full control again. The dollar index is expected to climb towards the 97 level in the upcoming period as the Federal Reserve is expected to hike the rate in December.

USDX is located in the buyer’s territory and seems poised to climb much higher after a minor consolidation.

The Euro dropped on the mixed Euro-zone data, the German Final Services PMI dropped from 55.2 to 54.7 points, the French Final Services PMI decreased from 57.4 to 57.3 points signaling that the expansion has slowed down. The Italian Services PMI decreased from 53.2 to 52.1 points, while Spanish Services PMI decreased from 56.7 to 54.7 points and has come much below the 55.7 estimate.

The PPI increased by 0.6%, beating the 0.4% estimate and the 0.3% growth in the former reading period, the Sentix Investor Confidence surged from 29.8 to 34.0 points, beating the 31.2 estimate.

You can see on the Daily chart that the rate has dropped, but failed to reach the 1.1574 previous low. Technically, it is still expected to drop further after the retest of the Head and Shoulders neckline (minor black line). Price failed to close on the Neckline signaling that we may have a quick drop, we’ll see what will happen on the USDX in the upcoming days. The next downside target will be at the 150% Fibonacci line (ascending dotted line), it could be attracted by the lower median line (lml) of the minor descending pitchfork as well. The perspective is bearish as long as is trading within the descending pitchfork’s body.