EUR/USD goes down as it should. I’ve said in the previous weeks that the price is too overbought to be able to climb much higher and we have a corrective phase. The dollar has taken the lead and is driving the price down on the short term as the US data have come in better lately. EUR/USD retested an important dynamic resistance and now it seems poised to approach and reach fresh new lows.

You should be careful in the afternoon as the rate will be driven by the fundamental factors. The US is to release high impact data that most likely will shake the markets. The Euro wasn’t inspired and impressed by the mixed Euro-zone data, the Italian Retail Sales dropped by 0.3% in August, even if the traders have expected to see a 0.2% growth, while the French Trade Balance increased unexpectedly higher, was reported at -4.5B, much above the -5.4B estimate. The French Gov Budget Balance was reported at          -93.0B, much below the -83.8B in the former reading period.

The Euro received a helping hand from the German Factory Orders, which increased by 3.6%, beating the 0.7%, but wasn’t enough. The US data should bring life on the EUR/USD, we’ll see what impact will have.

Price dropped after the retest of the median line (ml) of the descending pitchfork. The next downside target will be at the lower median line (LML) of the ascending pitchfork. Right now is hard to believe tat could still reach the confluence area formed between the LML with the lower median line (lml) of the descending pitchfork.

Technically, it should be attracted by the lower median line (lml) of the descending pitchfork. We’ll see what the US data will bring later, a major drop will be announced only by a valid breakdown from the ascending pitchfork’s body. The perspective remains bearish on the short term as long as is trading within the descending channel’s body. A minor increase could come only if the rate will fail to stabilize below the median line (ml).