EUR/USD rallied today and climbed above the 1.2042 long term horizontal resistance, but failed to reach the 1.2069 previous high. Is trading in the green as the ECB maintained the monetary policy unchanged for now, signaling some stimulus if needed. The USD has lost significant ground versus the Euro as the USDX plunged aggressively and reached fresh new lows.

The USDX dropped as much as 91.41 level, much below the 91.64 previous low, I’ve said in the last weeks that the index is still under massive selling pressure and only the US data could save it from the downside. Unfortunately, the United States figures continue to disappoint, so the FED is forced to keep the Federal Funds Rate on hold till next year.

The Euro rallied even if the Euro-zone data have come in worse than expected, the French Trade Balance dropped further, from -4.9B to -6.0B, much versus the -4.5% estimate, while the German Industrial Production increased by 0.0%, less versus the 0.5% estimate. Moreover, the revised GDP rose by 0.6%, matching expectations and the 0.6% growth in the former reading period.

I’ve added the USDX’s chart to show you why the USD has plunged aggressively versus its rivals. The index is on a declining path, has dropped much below the 91.64 previous low and now is challenging the outside sliding line (SL). Will drop much deeper if will close below it and below the previous low.

Price rallied and jumped above the UML, 50% Fibonacci line, 1.2042 static resistance and above the upper median line (uml) of the minor descending pitchfork. Price failed to reach the 1.2069 former high, showing a minor exhaustion. I’ve said in the previous articles that the rate is expected to approach and reach the mentioned resistance level after the false breakdown below the median line (ml) of the minor descending pitchfork.

Only a valid breakout will confirm a further increase in the upcoming period, while a fake out and a rejection will signal a reversal on the short term, we may have a selling opportunity if the rate will retest the UML or the upper median line (uml) of the minor descending pitchfork.