Our EURUSD forecast sees the pair trying to rebound, but the pressure is high and now it stands at 1.1804, just above today’s low at 1.1792.
Technically, the pair is now showing a bias to the downside after the US inflation data release. Forex traders will have noted that the DXY is trading in the green again, pushing the greenback higher.
US inflation data has come in better than expected, boosting the USD. The probability of the US Federal Reserve taking action sooner than expected after this unexpected growth in inflation has now risen.
The eurozone Industrial Production will be released tomorrow and is expected to drop by 0.3%. The US PPI and Core PPI will be published as well. Positive US data could keep the greenback higher against its rivals.
Also, the BOC could have an impact on the US Dollar. EUR/USD is bearish and it could confirm further drops soon if the DXY resumes its rally.
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EURUSD forecast – technical analysis: danger of drop to 1.1737
EUR/USD has increased a little to retest the ascending pitchfork’s lower median line (lml) but it has now closed far below it. Currently the pair stands below the weekly S1 (1.1807) as it tries to take out the dynamic support represented by the 150% Fibonacci line.
The next downside target obstacle is seen at 1.1781 level. Dropping and closing below this level could activate a larger drop. A new lower low could indicate a potential drop towards the S2 (1.1737).
It has found resistance at the ascending pitchfork’s median line (ml). Also, its failure to stay above the weekly pivot point (1.1851) signals that the downwards movement may resume. From the technical point of view, the aggressive sell-off has invalidated the Falling Wedge pattern and a potential bullish reversal.
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