FX.co ★ EUR/USD reaches confluence area

The EUR/USD pair resumed its sell-off and now is trading at 1.0884 at the time of writing. You knew from my previous analysis that the sellers could take full control after escaping from an up channel. The bias is bearish in the short term, so more declines are natural.

Yesterday, the Eurozone economic data came in worse than expected. On the other hand, the US Goods Trade Balance came in better than expected, while Prelim Wholesale Inventories matched expectations. Today, the German Prelim CPI is expected to report a 0.2% growth.

Moreover, the US is to release high-impact data as well. Final GDP is expected to register a 1.4% growth, Unemployment Claims could remain at 264K, Final GDP Price Index may report a 4.2% growth, while Pending Home Sales is forecasted to report a 0.5% drop. Better than expected US data should help the USD to resume its growth.

EUR/USD Bearish Movement!

You knew from my previous analysis that taking out 1.0935 should activate more declines. It has validated its breakdown below the weekly pivot point of 1.0920 and now it has reached the descending pitchfork's median line (ml) and the 1.0887 downside obstacles.

Technically, the rate challenges the confluence area formed at the intersection between the median line (ml) with 1.0887.

EUR/USD Forecast!

A valid breakdown through the confluence area, making a bearish closure below today's low of 1.0880 represents a new selling signal.