EUR/USD moves sideways in the short term, but it could resume its downside movement anytime as the pressure is high. The pair seems undecided only because the Dollar Index move in range as well.
DXY's further growth after the current accumulation may force the pair to drop deeper. EUR/USD's sideways movement could represent only a distribution before resuming its downwards movement.
On Friday, the New Home Sales come in better than expected being reported at 740K versus 712K expected. On the other hand, the German ifo Business Climate dropped from 99.6 points to 98.8 points far below the 99.0 estimates.
Today, the pair could move around the FOMC Brainard, Williams, and Evens speeches. The US is also to release its Durable Goods Orders and the Core Durable Goods Orders. In addition, ECB President Lagarde Speaks may bring some volatility as well.
EUR/USD Further Drop In Cards!
EUR/USD stands below the immediate downtrend line, so the bias remains bearish. It moves sideways within a minor triangle pattern. A downside breakout indicates downside continuation.
As you can see on the h4 chart, EUR/USD has found support on the former week S1 (1.1684) and on the second warning line (wl2) of the ascending pitchfork. Dropping and stabilizing below the warning line (wl2) could signal further drop.
1.1663 level stands as a major downside obstacle. Dropping and stabilizing below it may really signal a larger drop. This scenario could activate a major Head & Shoulders reversal pattern on the daily chart.
EUR/USD Predictions!
EUR/USD may drop anytime again as long as it stays below the downtrend line. The immediate support is at the second warning line (wl2). Dropping and stabilizing below it may really announce more declines.
A larger downside movement will be reported by a valid breakdown through the 1.1663 level. The downside scenario could be invalidated by a valid breakout above the downtrend line.
The material has been provided by InstaForex Company - www.instaforex.com