Negative CPI numbers fueled another drop in exchange rate. Bad German and French CPI data should be counteracted by ECB and bad CPI should be discussed at next ECB meeting, so we could possibly expect a further guidance on ECB policy. Any announcement about further policy steps will have a strong impact on the currency.
At this moment the EUR/USD is technically aligned with fundamentals, and that means sell the rallies is the option. POC comes in 1.0970-90 zone (H3,DPP, EMA89, 50.0) that is supported by the break of rising wedge - bearish pattern. If the price gets to POC we could expect another drop towards 1.0890 and 1.0850.
Currently we see a bullish divergence that could give us a retracement for new shorts but additionally we should also watch 1.0850. If the price doesn't get to POC we need to pay attention to any 4-hour close below the 1.0850 level, as the price should target 1.0820 and 1.0780 after the break of 1.0850.
