The strong euro was a common type for 2018 predictions and the rhetoric of urging the ECB to exit the QE program faster than anticipated prevailed last week. Nevertheless, when investors are doubtful after the weekend. The downbeat inflation data from the Eurozone and inability of EUR/USD to break 1.21, because the US labor market report was not bad at all, dented traders' confidence. The market reaches the curse of the so-called "Conviction trade" - if the market is strongly convinced, the lack of strength to freshly pull the market in a given direction and the correction comes with time. Still, quite upbeat data from Germany was released this morning (the industrial production in November rose by 3.4% m/m against 1.8% in the forecast), so the fundamental analysis is still backing up the euro. Maybe last week investors were too frantical and bought the Euro at "bad" levels, but now they have the opportunity to build up the exhibition on slightly better terms.
Let's now take a look at the EUR/USD technical picture on the H4 time frame. The market has violated the technical support at the level of 1.1961 - 1.1931 and currently is dropping lower towards the level of 1.1901. There is a golden trend line around this level that might provide support for the price as well. The level of 1.1902 is 50% Fibo retracement of the latest leg up, so the support around the level of 1.1900 will be hard to crack.
