The EUR/USD pair rebounded in the short term but the bias remains bearish. It was trading at 0.9894 at the time of writing. The price action developed a bearish continuation pattern. Still, the price could be driven by the fundamentals later today.
Fundamentally, the Euro-zone data came in mixed today. Earlier, the US ADP Non-Farm Employment Change came in at 239K versus 178K. This could be good for the USD and could signal that the NFPs could report better-than-expected data on Friday as well.
Later, the FOMC Statement and the FOMC Press Conference could really shake the markets. The FED is expected to increase the Federal Funds Rate from 3.25% to 4.00%.
EUR/USD Flag Pattern!
Technically, after dropping below the uptrend line, EUR/USD extended its downside movement within a down-channel pattern. It has dropped below the 0.9875 support but it has failed to stay below it.
Now, it has come back to retest the downtrend line which stands as a dynamic resistance. The rebound is seen as a flag pattern. This could announce a downside continuation.
A downside breakout from this minor flag, a valid breakdown below 0.9875 could activate more declines and could bring a new selling opportunity. The S1 (0.9820) stands as a potential downside target.
The material has been provided by InstaForex Company – www.instaforex.com