The EUR/USD dropped today and is trying to delete the yesterday’s gains, the minor retreat was somehow expected after the last impressive jump. Has found temporary resistance and now could decrease further in the coming days, I’ve said in my yesterday’s analyze that we could see a minor decrease because could try to close the gap up. However, the perspective remains bullish even if the we’ll have a minor decrease in the coming days. The USD is driving the pair lower as the USDX has found strong support right above the 99.12 static support and now has started to increase again, the index could become strongly bullish again on the short term if will close today near the 99.55 static resistance (support has turned into resistance).

I’ve added the USDX’s Daily chart to show you why the EUR/USD is going down right now, you can see that has jumped again above the median line (ML) of the major descending pitchfork, could increase further after the failure to close below the 99.12 static support. We had also a false breakout below the lower median line (lml) of the minor descending pitchfork, signalling that the bears could be exhausted. An increase towards the upper median line (UML) of the major descending pitchfork will force the USDX to dominate the currency market again on the short term.

The EUR/USD is going down aggressively as  and  could close the yesterday’s gap till the end of the day, could retest also the broken  Neckline  (red downtrend line). The Neckline retest could confirm the inverse Head and Shoulders pattern, I’ve said in my yesterday’s article that the rate could decrease a little on the short term before will climb higher.

The rate has found strong resistance at the first warning line (WL1) of the major descending pitchfork, we’ll see how will react when will touch the Neckline, we could have a buying opportunity if will test the confluence area formed at the intersection between the Neckline and the lower median line (lml) of the ascending pitchfork, but a drop below these levels will open the door for more declines again.