EUR/USD is trading in the red and seems poised to drop further in the upcoming period. Price has retested a dynamic resistance, but it has failed to close near it and above another resistance signaling that we may have another drop.
Right now you should stay away and wait for a confirmation that the rate will drop much deeper. Only a valid breakdown below the near-term support levels it will announce a potential broader drop.
Price moves somehow sideways on the short term and has developed a chart pattern, so we need a breakout from it before we consider opening a position.
USDX has closed much above the upside 50% Fibonacci line of the ascending pitchfork and above the SL1. I’ve told you that the perspective will remain bullish as long as the rate stays above these two dynamic support levels.
I’ve also said that the index could try once again to approach and reach the inside sliding line (sl1) of the ascending pitchfork. A further increase will force the USD to increase further versus its rivals and versus. I want to remind you that a valid breakdown below the UML and most important below the 50% line will open the door for a significant drop which will ruin the USD.
You can see that it has retested the lower median line (lml) of the ascending pitchfork, but it has failed to stay above the LML of the descending pitchfork. I want to remind you that we need a valid breakdown below the 150% Fibonacci line of the ascending pitchfork to have the first signal that the rate will move towards the 150% line of the descending pitchfork.
A false breakdown below the 150% lines it will announce a bullish momentum. A valid breakdown below the 150% line of the descending pitchfork it will be possible if the rate will close and stay on it.
The rate could drop further also if it will make a valid breakdown below the 1.1301 static support, which it represents a critical support.