Support at 1.0713:1.0718 failed and selling gathered pace throughout Thursday’s session the expected re-test did not come to fruition. Yesterday we said: “USD strength continues this morning we have already seen lows of 1.0731. So far we have seen a break below a trend line that has provided support since 13th March. It is likely that further moves lower find support at 1.0713/1.0718 respectively 31st March and 01st April lows and not far off is 1.0690 support the 61.8% retracement of the move higher between 15th to 26th March. We would look for a possible re-test of the broken trend line prior to get a confirmation of trend, a bounce lower off the 1.0820/1.0860 resistance would be bearish while a breach higher of this level would put price action back to neutral.”
The break of 1.07 exposes further bearishness targeting 1.0468. While the medium trend looks bearish, ahead of the weekend and with 4-hourly charts for both DXY and the EURUSD both depicting overbought/oversold conditions we may be in for some minor consolidation for the USD. EURUSD lows have so far been capped at 1.0606, we believe that the next horizontal support around 1.0570:1.0580 region should offer initial support were buying may push price back to the 1.0690 region before resuming the predominant downtrend. If 1.0570:1.0580 is unable to slow down the selling the next downside target is 1.0460 (March lows).