EUR/USD is into a corrective phase on the short term, it has found strong resistance and now is pressuring crucial support levels. Remains to see what will really happen in the upcoming days because a USDX’s further increase will send the rate tumbling. Price is still in the buyer’s territory despite the minor drop, this could be only temporary if the USDX will fail to take out the 93.81 static upside obstacle. Right now is better to stay away because we don’t have any trading opportunity, but I really hope that we’ll have one very soon as the rate is traded near very important support and resistance levels.
The Euro dropped further as the Euro-zone data failed to impress today, the German Industrial Production dropped by 1.4% in October, even if the specialists have forecasted a 0.9% growth, so the indicator remains deep in the negative territory after the 0.9% drop in September. The French Trade Balance dropped further, the deficit increased from 4.6B to 5.0B, more compared to the 4.7B estimate. The Euro-zone Revised GDP rose by 0.6%, matching expectations and the 0.6% growth in the former reading period, while the Italian Quarterly Unemployment Rate was reported at 11.2%, has come in line with expectations.
The EUR/USD dropped after the failure to stabilize above the upper median line (uml) of the minor descending pitchfork. It is pressuring the lower median line (lml) of the minor black ascending pitchfork and is somehow expected to take this out after the failure to retest the median line (ml).
Price failed to reach and retest the upper median line (UML) of the major dark blue descending pitchfork signaling that is too exhausted to stay higher at this moment. Technically a larger drop is favored after the failure to climb towards the 50% Fibonacci line (ascending dotted line), a valid breakdown below the turquoise median line (ML) could signal a broader drop. However, you should be very careful in the upcoming period because the rate will be driven by the fundamental factors.