More Downside In View, 1.17 Holds For Now
- The EUR/USD remains under pressure, so further drop is likely.
- Pair is moving sideways which could represent a distribution before resuming its downside movement.
- Only a valid breakout through the downtrend line could invalidate a downside continuation.
The EUR/USD forecast sees the pair moving sideways in the short term. This could represent a distribution before it resumes its downwards movement. The pressure remains high as the Dollar Index maintains a bullish bias. DXY’s upside continuation should force the EUR/USD to approach and hit fresh new lows.
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The greenback remains bullish even if the US data has come in mixed today. The Durable Good Orders registered a 1.8% growth in August beating the 0.7% estimate and the 0.5% growth registered in July. Moreover, the Core Durable Goods Orders rose by 0.2% less compared to 0.5% expected and after a 0.8% in the last reporting period.
On the other hand, the Eurozone Private Loans and the M3 Money Supply indicators were released today but I don’t believe that these figures had an impact on the EUR/USD pair. Tomorrow, the US CB Consumer Confidence, Goods Trade Balance, Prelim Wholesale Inventories, and the German Gfk Consumer Climate could move the price.
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Dollar Index Price Technical Analysis: Key Resistance Area
The Dollar Index jumped higher to challenge the 93.43 static resistance again. It’s located at 93.36 after failing to stabilize above the 93.43 obstacle. It has come back to retest the broken third warning line (wl3).
DXY could still resume its upside journey as long as it stays above 93.26 weekly pivot point. Making a valid breakout through the weekly R1 (93.54) could activate an upside continuation. This scenario signals USD’s appreciation versus its rivals.
EUR/USD Forecast: Price Technical Analysis: Distribution
The EUR/USD pair has found temporary support above the weekly S1 (1.1683) and now is located higher at 1.1707. From the technical point of view, the pair could extend its drop as long as it stays under the black downtrend line.
It’s trapped between 1.1907 and 1.1663 levels. A valid breakdown from this pattern may activate a larger downside movement. In the short term, it moves sideways between the weekly S1 and R1 levels. This could be a distribution before resuming its sell-off.
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