The currency pair dropped significantly in the yesterday’s session and now seems motivated to resume the corrective phase as the Euro-zone data have failed to impress earlier. However, it remains to see what will happen with the USDX in the upcoming days, it is located near an important resistance area and only a valid breakout will signal a further increase and a USD dominance.

The greenback increased versus all its rivals on the short term, but it needs more support from the United States economic data to be able to appreciate further in the upcoming period. It is premature to talk about a larger drop at this moment because the pair is located above very strong dynamic support.

The Euro is somehow expected to drop after the mixed Euro-zone data, the CPI Flash Estimate rose by 1.2% in February, matching expectations, while the Core CPI Flash Estimate increased by 1.0%, matching expectations as well. The German GFK Consumer Climate was reported at 10.8 points, matching expectations, while the Unemployment Change has come in better than expected, it was reported at -22K, lower versus the -17K estimate. The French data failed to impress today but remains to see what the US data will bring in the US session.

The currency pair has show exhaustion signs after the failure to reach and retest the upper median line (uml) of the minor black ascending pitchfork. Price failed to retest the median line (ml) of the minor ascending pitchfork, has retested only the 50% Fibonacci line (ascending dotted line) and now should drop towards the lower median line (lml) of the minor ascending pitchfork.

Price failed to stay above the 50% Fibonacci line, that’s why it could be attracted by the median line (ML) of the major black ascending pitchfork, only a valid breakdown below this level will confirm a larger drop in the upcoming period.