It looks like the recent consolidation in the EURUSD pair might be over as the euro has dropped below the short-term uptrend, possibly starting another leg lower.
At the time of writing, the EURUSD pair was down 0.50%, trading at around 1.1270, falling to one-month lows.
The USD bullish pressure has sent EURUSD below the important uptrend line, and the whole situation now looks like a flag pattern, which is usually a consolidation formation. Meaning upon a break from the pattern, the next move is in the direction of the primary trend – in this case, bearish.
The supports are located at 1.1270 (currently being tested) for the near future, and then the cycle lows at 1.12. Failure to stay above 1.12 could be another negative sign, possibly sending the euro toward the psychological level of 1.10.
The line MACD indicator on the daily chart has also sent a bearish signal for the first time since November, likely reinforcing the bearish cash. Additionally, this week’s Fed meeting could support the USD, unless there are some dovish surprises.
Alternatively, the euro must climb above the bullish trend line, actually at 1.1310, to cancel the immediate bearish pressure.