FX.co ★ EUR/USD More Declines To Be Confirmed

The EUR/USD pair dropped after reaching the 1.0484 level. DXY's rally forced USD to take the lead again. The price maintains a bearish bias despite temporary rebounds. In the short term, a minor rebound was natural after its massive drop.

Unfortunately, the Euro was punished by the eurozone ZEW Economic Sentiment and by the German ZEW Economic Sentiment which came in worse than expected at -28.0 points. On the other hand, the US data came in mixed today. The PPI rose by 0.8% matching expectations, while the Core PPI reported worse than the expected data.

Tomorrow, the eurozone is to release its Industrial Production and the Trade Balance indicators, while the US will publish the retail sales data. Still, the most important event of the week is represented by the FOMC. As you already know, the Fed is expected to hike the Federal Funds Rate by 50bps. The FOMC statement and the FOMC press conference could bring high volatility.

EUR/USD Rebound Ended

EUR/USD found support at 1.0396 after its massive drop. It has rebounded but the throwback was only a temporary one. In the short term, the price is trapped between the 1.0484 and 1.0396 levels.

As long as it stays below the median line (ml), the rate could drop towards new lows anytime. Only a new higher high could invalidate a downside continuation.

EUR/USD Forecast

A new lower low and dropping and closing below the 1.0396 level could activate more declines and could bring new selling opportunities at least towards the 1.0354 key level. Only a valid breakout below 1.0354 could activate a larger drop.