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  • The bias remains bearish as long as it stays under the downtrend line.
  • The FOMC and ADP Non-Farm Employment Change are seen as high-impact events.
  • A larger drop could be activated below the S1.

The EUR/USD price dropped as the US dollar recovered some ground. The pair has been dropping after the ECB meeting last week.

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The European Central Bank increased the interest rate as expected in the October meeting and announced more hikes in the next monetary policy meetings. As you already know from my previous analyses, the bias remains bearish despite temporary rebounds.

Fundamentally, the greenback remains bullish after the US ISM Manufacturing PMI came in at 50.2 points above 50.0 expected. At the same time, JOLTS Job Openings were reported at 10.72M, above the 9.75M expected and compared to 10.28M in the previous reporting period.

In addition, Wards Total Vehicle Sales and Construction Spending reported better than expected data. Today, the German Trade Balance is expected at 1.5B. German Final Manufacturing PMI could remain steady at 45.7 points, German Unemployment Change could drop to 12K from 14K, while the Eurozone Final Manufacturing PMI could remain at 46.6 points.

Still, the FOMC and the US ADP Non-Farm Employment Change are high-impact events. The Federal Reserve is expected to increase the Federal Funds Rate from 3.25% to 4.00%. The FOMC Statement and the FOMC Press Conference could really shake the markets.

EUR/USD price technical analysis: Downtrending channel

EUR/USD price

Technically, the currency pair dropped within a downtrending channel pattern. Failing to stabilize above parity (1.0000) signaled exhausted buyers. Now, it has taken out the 0.9952 and 0.9899 downside obstacles signaling more declines. The bias is bearish as long as it stays within the downtrend channel and below the median line (ML). Testing these levels may result in a deeper drop. Also, a new lower low may validate a sell-off.

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Still, you must be careful, as the fundamentals drive the price today. The EUR/USD pair could register sharp movements in both directions. A larger downside movement could be activated below the S1 (0.9820). On the contrary, jumping, closing, and stabilizing above 0.9952 and above the 1.0000 psychological level may signal potential growth in the short term.

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