The currency pair dropped significantly today as the USD has taken full control again. The USD should increase further as the USDX seems determined to reach fresh new highs in the upcoming days. The dollar index has rallied aggressively and has erased the last day’s drop.
USDX has climbed as much as 93.50 level today and resumed the yesterday’s bullish candle. The index has managed to jump above a very strong resistance level, but the breakout needs confirmation before we can say for sure that it will move towards fresh new highs.
The dollar index has come back only to retest a support level, I’ve said in the previous week that the drop could be only temporary.
The Euro dropped also because the Euro-zone data have failed to impress today. The German Prelim GDP rose by 0.3%, less versus the 0.4% estimate and versus the 0.6% growth in the former reading period, the German ZEW Economic Sentiment was reported at -8.2%, much below the -0.8% estimate, while the French Prelim Private Payrolls rose by 0.3%, less compared to the 0.4% estimate.
The Euro-zone Flash GDP surged by 0.4%, matching expectations and the 0.4% growth in the former reading period, the Industrial Production increased by 0.5%, less versus the 0.6% estimate, while the ZEW Economic Sentiment surged from 1.9 to 2.4 points, beating the 2.0% estimate.
The rate has edged lower after the yesterday’s failure to close near the median line (ML) of the ascending pitchfork and near the median line (ml) of the red descending pitchfork.
Price is pressuring the sliding parallel line, so a valid breakdown will confirm a further drop towards the 50% Fibonacci line (ascending dotted line). The rate could be attracted by the lower median line (lml) of the descending pitchfork. The major downside target could be somewhere at the lower median line (LML) of the black ascending pitchfork.