Technical Update - EURUSD downtrend potential to 1.0660, medium-term lower. Dollar Index eyeing 107

• EURUSD after being rejected at key resistance downtrend has resumed with downside potential to 1.0660 short-term. Medium-term potential to around 1.05

   

• The Dollar Index's recent close above 104.84, coupled with a supportive RSI, signals a continuing uptrend with potential to around 1.07

EURUSD experienced a rejection at the 0.618 Fibonacci retracement level at 1.0883, which was followed by a massive sell-off triggered by the latest US CPI numbers.
The strength indicator RSI has been reflecting negative sentiment since mid-March, hinting that the recent bullish movement was likely a corrective phase rather than a trend reversal (as disccussed in previous Technical Updates)

Currently, EURUSD is testing the 2nd April lows at 1.0723. There might be a brief rebound, but the overall expectation is that selling pressure will resume. A break below 1.0720 could lead to a further sell-off towards the 1.382 Fibonacci projection and support at 1.0660. To counter this bearish outlook, a close above 1.0885 is required.

Medium-term Outlook:
Should EURUSD close this week at or below its current levels, it would confirm a bearish breakout from the triangle-like pattern observed on the weekly chart.
Applying Fibonacci projections from the October 2023 lows to the December 2023 highs, the 0.618 retracement at current levels is crucial. The next key level would be the 0.786 retracement at 1.0596, nearing the October 2023 low at 1.0448.

This level aligns closely with the 0.382 Fibonacci extension of the triangle's top to bottom at 1.0475 (red Fibonacci lines and the vertical arrows). 
A break below the October 2023 lows at 1.0448 could precipitate a sell-off towards the 0.618 extension at 1.0280, marking a significant downward movement