FX.co ★ EUR/USD upside invalidated

EUR/USD plunged in the short term ahead and after the US data publication as the Dollar Index rallied and has managed to reach new highs. Unfortunately, the pair failed to confirm further growth.

Euro lost altitude as well because the eurozone trade balance was reported at 13.4B below 16.8B expected. On the other hand, the USD uptrend was boosted by better than expected retail sales data. The US Retail Sales increased by 0.7% versus 0.7% drop expected, while the Core Retail Sales rose by 1.8% though specialists expected to see a 0.1% drop. The pair declined despite poor Unemployment Claims data.

EUR/USD aggressive sell-off

The EUR/USD pair failed to stay within the ascending pitchfork's body. Now it has dropped far below the lower median line (lml) signaling strong selling pressure. It stands under the upper median line (UML) of a major downtrend line and below the weekly S1 (1.1778).

It moves down within the down channel's body. Technically, the pair has increased a little only because the Dollar Index has reached dynamic resistance. DXY's further growth after the current retreat may force the pair to drop towards fresh new lows.

Outlook

EUR/USD could resume its downside movement as long as it stays below the weekly S1 (1.1778). A larger downside movement could be activated by a valid break through the 1.1747 level.