- The currency pair signaled exhausted buyers after failing to stay above the median line (ml).
- Taking out the lower median line (LML) activates a larger drop.
- DXY’s further growth forces the greenback to appreciate versus its rivals.
The EUR/USD price posted significant losses as the US dollar rebounded amid growing global recession worries. The greenback’s further growth may further dominate the currency market.
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The pair is trading at 1.0239 at the time of writing. It seems to be under strong selling pressure. Surprisingly or not, the USD is strongly bullish even though the US reported mixed data in the previous days.
Today, the German PPI registered a 4.2% drop versus the 0.9% growth expected. Fundamentally, the economic data could have a big impact on Wednesday. The FOMC Meeting Minutes, the US Flash Services PMI, and the German Flash Manufacturing PMI and Flash Services PMI could really shake the markets.
Dollar Index price technical analysis: Swinging higher
The DXY found support in the 105.65 – 105.78 area. Now the index has turned to the upside. As you can see on the hourly chart, the index escaped from the ranging pattern signaling a larger rebound.
The Dollar Index was in a corrective phase before resuming its major uptrend. The retreat seems over. That’s why the greenback could dominate the currency market again. The upper median line (UML) represents the next major resistance. A valid breakout through this level activates further growth and helps the traders to catch new USD longs.
EUR/USD price technical analysis: Strong bearish dominance
From the technical point of view, the price action signaled exhausted buyers after failing to stay above the ascending pitchfork’s median line (ML). Now, it has dropped below 1.0271 former low, activating more declines if it stays under this level.
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The pair challenges the S1 (1.0240), which represents static support. The 1.02 psychological level and the ascending pitchfork’s lower median line (LML) are downside targets and obstacles. A larger downside movement could be activated by a good breakdown below the lower median line (LML). As long as it stays above the lower median line, the pair could develop a new leg higher.
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