EUR/USD More Downside In View

EUR/USD is traded at 1.0826 level and it seems very heavy as the USD is boosted by the USDX's rally. The pair has turned to the downside again after a temporary rebound, it is under strong selling pressure and it could drop significantly if the Dollar Index will resume the bullish momentum.

The Dollar remains strong despite some poor US data and even if the FED has added new measures to fight the COVID-19 effects. EUR/USD has increased on the short term only because the dollar was punished by some unexpected numbers from the US economy and not because the EUR is strong these days. I've said in the last two days that EUR/USD has signaled exhausted signs and it could decrease again after the failure to confirm a further increase in the short term. However, we need another lower low, a drop below 1.0816, to be sure that the drop will continue.

EUR/USD has failed to retest the inside sliding line (sl) and to touch the R1 (1.1) level signaling that the bulls are exhausted. The pair has decreased and it has escaped from the minor channel between the sliding line (sl) and the lower median line (lml), it is traded also below the weekly Pivot Point (1.0884) level, so a valid breakdown below the S1 (1.0816) will validate a further decrease.

I believe that a further decrease could be invalidated only by a false breakdown with a great separation below the S1 (1.0816) level and by a valid breakout above the 1.0917 level.

EUR/USD will continue to drop if it closes and stabilizes below the S1 (1.0816) level, the next downside targets are seen at S2 (1.0700) and at S3 (1.0632) levels. The USD could drive the pair lower if the USDX will stabilize above the 100.00 psychological level and if it jumps higher.

The upside was invalidated when the price has escaped from the ascending pitchfork's body, technically, it could drop at least till the 1.0772 low after the failure to approach and reach the median line (ml).

EUR/USD is bearish as long as the price stays below the broken lower median line (lml) of the minor ascending orange pitchfork.