EUR/USD  dropped a little in the last hours as the USDX is trading in the green right now on the Daily chart. Price erased the morning gains and has come back down to pressure a dynamic support, but is hard to tell if we’ll have a valid breakdown or not.

The currency pair signaled an exhaustion on the short term after the failure to reach and retest the 1.1960 previous high. We’ll see what will happen because the perspective remains bullish on the short term.

Right now is very important to see what will really happen with the USDX, which has come back above the 93.00 psychological level, but is still trapped below two very strong dynamic resistance levels. I’ve said in the last days that. The Euro-zone data have come in mixed today, the Final Manufacturing PMI increased from 60.0 to 60.1 points, beating the 60.0 estimate, the Spanish Manufacturing PMI increased from 55.8 to 56.1, but failed to reach the 56.6 estimate. The German Final Manufacturing PMI remained steady at 62.5 points for the second month in November, the Italian Manufacturing PMI jumped from 57.8 to 58.3 points, less versus the 58.4 estimate, while the French Final Manufacturing PMI increased from 57.5 to 57.7 points, signaling a further expansion.

You can see that the rate is pressuring the upper median line (uml) of the descending pitchfork after another false breakout above the sliding line (sl). A valid breakdown inside the descending pitchfork’s body will signal a drop at least till the lower median line (LML) of the ascending pitchfork. A breakdown below the lower median line (LML) will signal a larger drop.

EUR/USD could go down sharply if the USDX will rallied in the upcoming days. Technically, it should drop further after the failure to retest the median line (ML) of the ascending pitchfork. Right now will be better to stay away because we don’t have any trading opportunity. A buying opportunity could come if the rate will close above the sliding line and if will come down to retest the lower median line (LML).