Abstract：EUR/USD has turned to the downside again in the short term after another false breakout above the major near-term dynamic resistance. The dollar has taken the lead again as the US Dollar Index is trading in the green today and it tries to resume yesterday’s rebound.
EUR/USD has turned to the downside again in the short term after another false breakout above the major near-term dynamic resistance. The dollar has taken the lead again as the US Dollar Index is trading in the green today and it tries to resume yesterdays rebound.
It remains to see what will really happen because the USDX is still under pressure, so a further drop will boost the EUR/USD which could finally escape from a major descending pitchfork.
● USDX Under Pressure
You can see that the USDX has broken below the minor uptrend line, up channels support, signaling that it could drop deeper, now it has come back to retest the broken line and maybe the Pivot Point (97.14).
The dollar index moves in range, between 78.6% and the 61.8% retracement levels, so only a valid breakout from this chart pattern will confirm a clear direction. EUR/USD will register a significant drop only if the USDX will make a valid breakout above the 61.8% level and above the upper median line (UML).
The USDX is vulnerable, so a downside breakout from this minor range and another lower low will suggest buying EUR/USD.
● EUR/USD Imminent Breakout
EUR/USD has come back below the upper median line (UML), but I really believe that another jump above this dynamic resistance will announce a potential valid breakout and a further increase. You can see that the pair has managed to breakout above the minor downtrend line and now it has retested it, so this could represent a first bullish sign.
However, only another higher high or another lower low will bring a perfect trading opportunity, EUR/USD moves sideways in the short term. You can go long if the rate will make a valid breakout above the 1.1348 level, or you can consider going short if EUR/USD will drop and close below the 1.1168 level.
EUR/USD has failed to reach the 1.1348 in the last attempt, it has decreased a little to recapture more bullish energy before it will try once again to escape from the descending pitchforks body and from the minor range.
It is traded above the monthly Pivot Point (1.1252) level, the minor drop could be considered to be only a retest before EUR/USD will resume its upside journey. A valid breakout above the upper median line (UML) and from the extended range will send the pair towards the 1.1495 high and towards the R2 (1.1574) level.
Technically, EUR/USD is bullish and it seems determined to climb higher, the several false breakdowns below the 1.1200 psychological level have confirmed that the buyers are still very strong and that the decrease was only a temporary one.
A valid breakout above the upper median line (UML) is imminent as EUR/USD has stayed this dynamic resistance, the confirmation will be given by the jump and close above the 1.1348 high. I believe that a further increase could be invalidated only by a major bearish engulfing or by a pin bar on the upper median line (UML), if the pair will make a false breakout from this range.
[About The Author]
Olimpiu Tuns
is a seasoned market analyst / trader / trainer on the financial
markets with expertise in forex, cryptocurrencies, commodities, futures,
options, index, CFD for more than 8 years. He is also a famous blogger
in both technical and fundamental analysis, trading signals, trade
setups, etc.
He
has worked as a Market Analyst / Consultant for three major Brokerage
companies, Admiral Markets, MultiBank Exchange Group and InstaForex
(live webinars, market analysis, educational materials, video analysis,
video tutorials, ghostwriting, content creator), as a Social Media
Manager and as a Financial Markets & Crypto Analyst / Contributor
for very important news portals/blogs (investing.com, benzinga.com,
forexalchemy.com actionforex.com, countingpips.com), websites,
educational platforms (Forex.Academy, Forex.Today), independent clients,
etc.
Olimpiu Tuns currently works as a Financial Markets & Crypto Analyst / Signal Provider / Trader / Trainer.
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