EUR/USD Corrective Phase Underway!|KOL Analysis•Olimpiu Tuns

EUR/USD has finally managed to drop below the 1.17 psychological level confirming a corrective phase after the last swing higher. The pair has escaped from two channels signaling a deeper drop in the short term.

Actually, yesterdays sharp drop has confirmed a Head and Shoulders pattern on the Daily chart. So, a drop of at least 250 pips is expected. EUR/USD should continue to drop if the dollar index stabilizes above 93.81 level.

Today, the Euro-zone and US data could confirm the USDXs reversal. Still, you should be careful the economic figures could bring high vollatility and sharp moves. The German Flash Services PMI could increase to 53.0 points signaling further expansion, but unfortunately, the Flash Manufacturing PMI could drop from 52.2 to 52.0 announcing the expansion slowdown.

Furthermore, the Euro-zone Flash Services PMI could jump from 50.5 to 51.0, while the Flash Manufacturing PMI is expected to drop from 51.7 to 51.5 points. On the other hand, the US Flash Services PMI and the US Manufacturing PMI indicators are expected to drop and could pause the EUR/USD drop.

● US Dollar Index Breakout Attempt!

USDX edegs higher and tires to take out the dynamic resistance represented by the upper median line (UML) of the descending pitchfork. Ive told you in my previous analyses that a valid breakout above the 93.81, another higher high, could bring a valid breakout above the UML as well.

The index has continued to increase after its failure to retest the 92.55 level and the minor downtrend line. EUR/USD drops like a rock as the USDX rallies. USDXs valid breakout above the UML could signal an up reversal, so EUR/USD could develop a large downside movement.

The US Dollar Index failed to touch the median line (ML) of the descending pitchfork, so technically, it is somehow expected to climb towards the 102.99 high in the medium to the long term. Such an important growth could send EUR/USD towards 1.06 area again.

● EUR/USD Vulnerable To Slide Further!

EUR/USD is traded at 1.1688 level ignoring the 1.17 psychological level. A valid breakdown below this critical static support could bring a great selling opportunity as the pair will be determined to reach fresh new lows.

It has escaped from the up channel‘s body and several failures to reach the second warning line (WL2), and now s traded below the 250% Fibonacci line, down channel’s support.

Stabilizing under 1.17 and below the 250% Fibonacci line validates a further corrective phase. The first warning line (WL1) and the 1.1495 level are seen as potential downside targets. Only a valid breakdown through these levels confirms a larger leg down.

The selling pressure remains high as long as the rate stays below the second warning line (WL2).

[About the Author]

Olimpiu Tuns is a seasoned market analyst / trader / trainer on the financial markets with expertise in forex, cryptocurrencies, commodities, futures, options, index, CFD for more than 8 years. He is also a famous blogger in both technical and fundamental analysis, trading signals, trade setups, etc.

He has worked as a Market Analyst / Consultant for three major Brokerage companies, Admiral Markets, MultiBank Exchange Group, and InstaForex (live webinars, market analysis, educational materials, video analysis, video tutorials, ghostwriting, content creator), as a Social Media Manager and as a Financial Markets & Crypto Analyst / Contributor for very important news portals/blogs (investing.com, benzinga.com, forexalchemy.com actionforex.com, countingpips.com), websites, educational platforms (Forex.Academy, Forex.Today), independent clients, etc.

Olimpiu Tuns currently works as a Financial Markets & Crypto Analyst / Trader / Trainer / Portfolio Manager.

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