The pair made attempts for a downward movement, but disappointing data on the US existing home sales weakened the dollar against the European currency. A downward channel was has been broken, and the pair is currently trying to raise to intraday level 1.2780, which is a strong barrier on the way up.
On a fundamental level we should pay our attention to the US weekly report on initial jobless claims, which is going to be released at the beginning of the American session. The index is expected with a decrease from 500 thousand to 484 thousand, which can become a positive factor for the dollar.
As for the technical side, strong support is seen at 1.2780. In case the price doesn’t raise and fix above, we’ll be observing a further downward movement with the target around 1.2500
Structurally, we are having a model with parameters b=1.6, d=1.5, which is still having a potential for a descent.
Analysis prepared by:
Maxim Dmitrievsky
Forex4you analyst