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The EUR/USD pair crashed in the short term as the Dollar Index rallied. Now, it is located at 1.0916 and it seems strongly bearish. After its upwards movement, a retreat is natural. Still, a broader correction needs confirmation.
Fundamentally, the Euro took a hit from the Eurozone CPI Flash Estimate indicator which reported only a 2.4% growth versus 2.7% growth estimate, and from the Core CPI Flash Estimate which registered a 3.6% growth versus 3.9% growth expected.
Later, the US is to release high-impact data and should bring strong action. The USD needs more support from the US economy to be able to extend its current appreciation. Unemployment Claims and Core PCE Price Index could report worse data compared to the previous reporting period, while Personal Income and Personal Spending could report a 0.2% growth.
From the technical point of view, the EUR/USD pair registered a false breakout above 1.1008 and now it has turned to the downside.
Now, it is almost to reach the uptrend line which represents a dynamic support. As long as EUR/USD stays above it, the rate could develop a new bullish momentum and could extend its growth. So, the retreat could be only temporary.
Dropping and closing below the uptrend line, retesting this line and staying below the new downtrend line bring us new selling opportunities.
A false breakdown below the uptrend line and making a valid breakout above 1.0964 and above the minor downtrend line activates further growth.
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