• A new lower low in EUR/USD price could activate more declines.
• False breakdowns could signal a new leg higher.
• 07 psychological level stands as a potential target.

The EUR/USD price slumped after the US Non-Farm Payrolls, Average Hourly Earnings, Unemployment Rate, and Revised UoM Consumer Sentiment came in better than expected on Friday.

The price is trading at 1.0736 at the time of writing, above yesterday’s low of 1.0723. The DXY’s strong rally boosted the greenback. Still, we cannot exclude the probability of an upside retracement.

The downside pressure remains high as the US ISM Services PMI came in at 53.4 points, above the 52.0 points expected yesterday.

On the other hand, the German Trade Balance and German Final Services PMI came in better than expected, while the Eurozone PPI and Final Services PMI matched expectations.

Today, the Eurozone Retail Sales reported a 1.1% drop versus the 0.9% drop expected, while the German Factory Orders rose by 8.9% even if the traders expected a 0.1% drop.

Today, the FOMC Member Mester Speaks and the BOC Gov Macklem remarks could move the markets.

From the technical point of view, the bias remains bearish despite temporary rebounds. The sell-off was paused by the major descending pitchfork’s median line (ML) and by the 1.0723 level.

Only false breakdowns may announce exhausted sellers and could signal a larger rebound. A new higher high, jumping and closing above today’s high of 1.0762, confirms more gains.

On the contrary, staying near the downside obstacles may announce an imminent breakdown. A new lower low and making a valid breakdown below the median line activates more declines. If the price drops, the S2 (1.0703) and the 1.07 psychological level are potential downside targets.

https://www.forexcrunch.com/blog/2024/02/06/eur-usd-price-pauses-downside-amid-oversold-conditions/