The currency pair drops like a rock and seems unstoppable on the short term. Price has managed to take out two, very important dynamic support levels and now is targeting another downside obstacle. The dollar has taken the lead on the short term and drives the pair towards new lows. The current drop is natural after the amazing upside movement and after the failure to make new highs and to close above the 1.2041 major horizontal resistance.
The USDX climbed as much as 93.51 level today and will climb much higher in the upcoming hours if the United States data will come in line with expectations or better. Only another disappointment will send the rate down again on the short term.
The Core Durable Goods Orders and the Durable Goods Orders are expected to increase by 0.2%, respectively by 1.0% in August. Moreover, the Pending Home Sales could drop by 0.5%, less versus the 0.8% drop in the former reading period.
Price is into a corrective phase on the daily chart after the failure to stabilize above the upper median line (uml) of the ascending pitchfork and above the 50% Fibonacci line of the major black ascending pitchfork. EUR/USD has managed to drop below the median line (ml) of the ascending pitchfork and much below the median line (ml) of the descending pitchfork. The next downside target will be at the 1.1711 level, but the next major downside target will be at the median line (ML) of the major black ascending pitchfork.
