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The EUR/USD pair plunged in the last hour as the Dollar Index has managed to extend its growth. DXY's rally boosted the USD. Technically, the currency pair signaled that the upside movement is over and that the rate could turn to the downside again.
The Dollar Index failed to make a new lower low signaling that the corrective phase ended. The US reported better than expected data on Monday and mixed data yesterday. The greenback is strongly bullish even if the US CB Consumer Confidence dropped from 103.2 to 98.7 points below 100.0 expected.
Today, the Euro-zone and US data came in mixed. The German Prelim CPI rose by 0.1% less versus the 0.4% growth expected, M3 Money Supply came in worse than expected as well, while the Private Loans reported better than expected data.
On the other hand, the US Final GDP has disappointed after registering a 1.6% drop versus only a 1.5% drop expected. On the contrary, the Final GDP Price Index reported an 8.2% growth versus the 8.1% forecasted.
The EUR/USD pair extended its sell-off after failing to reach and retest the 1.0544 weekly pivot point. I've told you in my previous analysis that the rate could try to rebound after registering only a false breakdown below the 1.0514 former low.
Technically, the bias is strongly bearish as long as it stays under the pitchfork's upper median line (uml). Its failure to stay above 1.0514 in the last attempt announced more declines.
The aggressive breakdown below the 1.0503 yesterday's low signaled more declines and was seen as a short opportunity. Also, the current H1 bearish closure below today's low of 1.0484 indicates a potential drop far below the S1 (1.0480), towards the median line (ml) of the descending pitchfork.
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