FX.co ★ EUR/USD: imminent breakdown

EUR/USD dropped like a rock in the short term and now is trading at 1.0588 at the time of writing. As you already know, the rate continues to move sideways, that's why we have to wait for strong confirmation before going short.

The USD was boosted by US data today. The Final GDP rose by 3.2% compared to the 2.9% expected and versus the 2.9% growth in the previous reporting period, while the Unemployment Claims came in at 216K versus the 221K expected.

EUR/USD Sell-Off!

As you can see on the H1 chart, EUR/USD retested the broken uptrend line again and now is almost to hit the 1.0582 static support. Personally, I've drawn a descending pitchfork, the upper median line (uml) represents a dynamic resistance.

As long as it stays within the pitchfork's body, the rate could extend its current sell-off. Still, it remains to see how it will react around the 1.0582 support.

EUR/USD Outlook!

A valid breakdown below 1.0582 activates a deeper drop with a first downside target at the median line (ml). This could represent a new selling opportunity.

Don't forget that a false breakdown may announce a new bullish momentum toward the range's resistance.