The EUR/USD pair plunged in the last hours as the Dollar Index has managed to resume its upside journey. It has dropped as low as 1.1377 registering a new lower low. The currency pair is located deep in the seller's territory, so a further drop is favored.
Still, a temporary rebound could be natural after its massive sell-off. USD received a helping hand from the US Empire State Manufacturing Index which was reported at 30.9 points above 22.1 expected and far above 19.8 in the previous reporting period.
On the other hand, the eurozone Trade Balance dropped from 9.7B to 6.1B though specialists expected potential growth to 12.5B. Don't forget that the US retail sales will be released tomorrow and this data will have a major impact.
EUR/USD amazing sell-off
EUR/USD plunged through the Descending Pitchfork's median line (ML), 1.1422, and under the 1.14 psychological level. Now, it has found support at the weekly S1 (1.1380) level. Technically, the pressure is high as long as it's located under the Descending Pitchfork's median line (ML).
Dropping below 1.1422 opened the door for more declines. A minor rebound could bring new short opportunities. It could come back to test and retest the median line (ML) before resuming its drop.
EUR/USD forecast
Its aggressive breakdown through the 1.1422 and below the median line (ML) activated a larger downside movement. The Descending Pitchfork's inside sliding line (SL) stands as a downside target. We may have a new short opportunity if EUR/USD comes back to test and retest the median line (ML). Stabilizing under 1.14 could signal a potential deeper drop.
The material has been provided by InstaForex Company - www.instaforex.com