EUR/USD is trading in the red and seems determined to breakdown below a very important dynamic support. A valid breakdown will signal a further drop in the upcoming period. A USDX’s further increase will force the dollar to capture more ground versus all its rivals and not only against the Euro. Price has increased a little and it has tried to retest the near-term resistance levels, but unfortunately, it has failed to reach then signaling an exhaustion.

EUR/USD moves somehow sideways on the Daily chart, that’s why we need a confirmation that the rate will drop further.

The USDX has bounced back after the failure to reach and retest the inside sliding line (sl), but it remains to see if it will have enough energy to approach and reach the upside 50% Fibonacci line of the ascending pitchfork and the inside sliding line (SL) of the major descending pitchfork.

I’ve told you in the previous reports and in the previous weeks that only a valid breakout above the inside sliding line (SL) will confirm a potential upside movement and the USD’s dominance. I want to remind you that a valid breakdown below the sliding line (sl) and below the median line (ml) will announce a further drop and the USD’s crash.

EUR/USD is pressuring the downside 50% Fibonacci line of the minor ascending pitchfork after the failure to reach and retest the median line (ml) and the downside 50% Fibonacci line of the major descending pitchfork.

It could move towards the lower median lines (lml and the LML), actually it could be attracted by the confluence area formed between these two dynamic support lines. A valid breakdown below the mentioned support lines will signal a further drop towards the outside sliding line (descending dotted line from below the LML) and only a valid breakdown below this line it will signal a larger drop.