- The EUR/USD pair could extend its sell-off if it closed below the lower median line (lml).
- In the short term, it was somehow expected to rebound after reaching the channel’s downside line.
- Only a major bullish pattern around the support area could signal a new leg higher.
The EUR/USD forecast sees the pair trading in the red at 1.1439 level as the Dollar Index has managed to recover after its temporary decline. The selling pressure remains high, so the currency pair could approach and reach fresh new lows anytime.
The price has tried to rebound after its most recent sell-off, but the USD remains very strong. The EUR/USD pair recovered a little only because the United States Prelim UoM Consumer Sentiment was reported lower at 66.8 versus 72.5 expected on Friday.
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Today, the Euro received a hit from the Euro-zone Trade Balance which was reported at 6.1B far below 12.5B estimates and compared to 9.7B in the previous reporting period. On the other hand, the Empire State Manufacturing Index was reported better than expected. The indicator jumped from 19.8 points to 30.9 points, exceeding the 22.1 forecasts.
Tomorrow, the US Retail Sales could report a 1.3% growth in October versus 0.7% growth registered in September, while the Core Retail Sales is expected to rise by 1.0% in the last month compared to 0.8% in the previous reporting period.
The Euro-zone Flash GDP, Flash Employment Change, and the French Final CPI will be released as well.
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EUR/USD Forecast: Price Technical Analysis – Down Channel
The EUR/USD pair dropped within a down channel pattern. After reaching the downside line, the price was somehow expected to rebound. Personally, I’ve drawn an ascending pitchfork hoping that I’ll catch a new swing higher.
As you can see, the currency pair challenges the ascending pitchfork’s lower median line (lml). Staying above it, registering only false breakdowns through this dynamic support could signal potential growth in the short term. On the contrary, closing and stabilizing under this line may signal further drop at least towards the 1.1422 historical level.
Technically, only a strong bullish pattern here could announce a new leg higher. Still, you should keep in mind that the bias is bearish, so the EUR/USD could extend its drop anytime.
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