Video Length: 00:06:34

Fundamentals:

On Tuesday we found out that the U.S. international trade deficit was down $4.0B from September, US consumer confidence fell for fourth consecutive month, while Home price gains accelerated in September, Consumer sentiment in Germany picked up again in November, and RBA’s Philip Lowe said The Reserve Bank may create money to buy government bonds if it runs out of levers to boost the economy when it drops the official interest rates to 0.25%. On Wednesday we have the US GDP data as the main economic event

Technical Analysis

Today I’m looking at the EUR/USD pair which despite forming a potential reverse head and shoulder bullish reversal chart pattern in the past couple of months, has now broken below the daily Ichimoku cloud.

(Click on image to enlarge)

But if you look closely at the chart, you’ll also see that the future cloud is bullish, and that the pair seems to have found support above the 78% Fibonacci retracement level of 1.099. Now, a break below the Ichimoku cloud does indicate further drops within time frame of the chart, in this case, the daily chart. But in this case, considering the other bullish signals around, only if the 1.099 support level is broken, would we see further drops towards the next support of 1.08.