- The EUR/USD pair dropped, but the sell-off could be over soon.
- The US data should bring sharp movements.
- Technically, the flag pattern may announce a new leg higher.
The EUR/USD price dropped on Thursday after reaching a yearly high at 1.1095. However, the bias remains bullish despite the current retreat.
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Surprisingly or not, the USD took the lead even though the Advance GDP registered a 1.1% growth versus the 2.0% growth expected, less than 2.6% growth in the previous reporting period.
In addition, Pending Home Sales came in worse than expected as well. Fundamentally, the greenback received a helping hand from the Unemployment Claims and the Advance GDP Price Index.
Today, the Eurozone reported mixed data. German Prelim GDP rose by 0.0% growth versus the 0.2% growth estimated. German Unemployment Claims came in at 24K compared to 8K forecasts, while German Prelim CPI is expected to register a 0.6% growth.
Later, the US data should bring strong volatility. The Employment Cost Index is expected to report a 1.1% growth. The Core PCE Price Index may register a 0.3% growth, Chicago PMI could drop from 43.8 points to 43.6 points, while the Revised UoM Consumer Sentiment is expected at 63.5 points.
EUR/USD price technical analysis: Flag pattern
The EUR/USD price turned to the downside after registering a false breakout through 1.1075. The pair has dropped within a down-channel pattern.
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Still, the chart formation represents a potentially bullish pattern. Its failure to stay above the R2 (1.1060) or above the upper median line (uml) announced exhausted buyers.
From the technical point of view, the weekly pivot point of 1.0970 stands as a downside obstacle and target. The price could rebound after reaching this zone.
In my opinion, we have a strong demand zone around the pivot point. A good breakdown below it may announce a deeper drop toward the median line (ml).
Poor US data today should push the currency pair higher again. So, the fundamentals are decisive in the short term.
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Olimpiu Tuns 
Olimpiu Tuns graduated with a Master in Business Administration and is a seasoned Market Analyst / Trader / Trainer with 10 years of experience in the financial markets having expertise in Forex, Commodities, Index, Cryptocurrencies, and Stocks. He worked as a Market Analyst for three major brokerage companies, as a prop trader, and as a contributor/content creator for news portals and educational platforms.
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