EUR/USD dropped today and resumed the minor bearish movement. Is trading in the red as the USDX has climbed much higher in the last days. The dollar index has managed to jump above the 94.00 psychological level and seems motivated to reach a dynamic resistance.

The currency pair turned to the downside and could drop further after the failure to make new highs.  We’ll see what will happen tomorrow as the fundamental factors will take the lead again. Technically is somehow expected to drop further, but the fundamental factors could force it to turn to the upside again.

It moves somehow sideways on the short term, but I really hope that we’ll have a clear direction very soon and a fresh trading signal. The Euro dropped on the mixed Euro-zone data, on the other hand, the USD received support from the United States Core PPI, which increased by 0.3 in November, beating the 0.2% estimate, the PPI surged by 0.4%, matching expectations and the 0.4% growth in the former reading period.

The Euro was weakened by the German ZEW Economic Sentiment, which it was reported at 17.4 points, much below the 17.9 estimate and below the 18.7 in the former reading period, the ZEW Economic Sentiment dropped from 30.9 to 29.0 points, much below the 30.2 estimate.

Price is pressuring the median line (ML) of the turquoise pitchfork, a valid breakdown will signal a further drop, but nothing is certain at this moment.

We’ll see what will happen after the FOMC, this could be only a minor drop and a retest of the ML if the FED will disappoint tomorrow. As you already know, the FED is expected to increase the Federal Funds Rate from 1.25% to 1.50%, we’ll see how the USD will react because this it was expected by the traders, so it could drop despite a hike.

Techncally it should drop much deeper after the failure to reach and retest the upper median line of the major blue descending pitchfork.