- The bias remains bearish despite temporary rebounds.
- A new lower low activates more declines.
- Breaking above the median line announces that the sell-off is over.
The EUR/USD price slipped during the European session, trading at 1.0864 while writing. The downside pressure is high, so more declines are on the cards.
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The Dollar Index remains bullish, so further growth should lift the greenback. Yesterday, the USD received a helping hand from the US Unemployment Claims, which came in better than expected in the last week, at 239K versus 240K estimates. At the same time, the Philly Fed Manufacturing Index was reported at 12.0 points compared to -9.8 points.
On the other hand, the Eurozone Trade Balance also came in better than expected, at 12.5B versus 3.8B estimated. Today, the EUR/USD pair tried to rebound and recover, but the selling pressure remained high, so the rate erased the minor gains.
Fundamentally, the Eurozone Final CPI reported 5.3% growth matching expectations, while Final Core CPI increased by 5.5% as expected.
Later, the Canadian economic data could have an impact on the greenback. The greenback is bullish as the FOMC Meeting Minutes signaled potential new hikes in the next monetary policy meetings.
EUR/USD Price Technical Analysis: Bearish dominance
From the technical point of view, the EUR/USD pair remains bearish as long as it stays below the median line (ml) of the descending pitchfork. It’s trapped between the weekly S1 (1.0890) and 1.0861 levels.
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The current range could represent a new distribution pattern. Taking out the 1.0861 downside obstacle may result in more declines. The weekly S2 of 1.0840 and the lower median line (lml) represent potential downside obstacles if the rate continues to drop.
The downside continuation scenario could be invalidated only if the price stays above 1.0861 and jumps above the median line (ml). Temporary rebounds could bring new short opportunities.
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