EUR/USD drops like a rock and seems determined to take out a very strong dynamic support and to resume the corrective phase. The USDX has managed to increase a little after yesterday’s US data and now is pressuring a very strong static resistance.

The USDX  is somehow expected to climb much higher and maybe it will reach a dynamic resistance. A USDX’s further increase will force the USD to increase versus all its rivals and not only versus the Euro.

USDX has managed to escape from the minor chart pattern and now is challenging the 97.54 static resistance. I’ve said in my previous reports that the next upside target will be at the inside sliding line (sl1) of the ascending pitchfork.

Technically, it is expected to increase further after the false breakdown below the SL1 and below the upside 50% Fibonacci line. It has also failed to close on these support levels, so the current upside movement is natural.

The index could drop again only if it will fail to make a valid breakout above the sliding line (sl1) and the upper median line (uml). A false breakout above the sliding line (sl1) followed by a failure to retest it will announce a potential drop and the USD’s decline.

EUR/USD has managed to slip below the 150% Fibonacci line of the minor ascending pitchfork and below the 1.1301 static support. The next target will be at the outside sliding line (SL) of the descending pitchfork. A valid breakdown below this support will confirm a further drop towards the first warning line (wl1) of the minor ascending pitchfork and towards the 150% line of the descending pitchfork. It remains to see if the rate will test and retest the broken levels before it will drop much deeper. You should be careful because a false breakdown below the 150% line and below the SL could send the rate higher again.