EUR/USD continues moving sideways above the critical support area. It can drop anytime, if the eurozone data turns out to be disappointing today. The euro wasn't strong enough to drag the pair higher despite several false breakdowns and rejections from the 1.0785 static support.
The outlook is bearish. The current range can represent distribution and the price can resume the downside movement. The French, German, and the eurozone services and manufacturing data can shake the EUR/USD pair today. You should be ready for high volatility. I believe that some poor figures can force the euro to depreciate versus the US dollar.
EUR/USD is under massive selling pressure after another failure to reach and retest the lower median line (lml) of the descending pitchfork. It continues trading right above the S2 (1.0785) level and above the 150% Fibonacci line. In the previous analysis, I said that only a reversal pattern would signal a potential upside movement.
Stochastic and MACD are signaling a bullish divergence. But we cannot consider a reversal as long as the price is located below the previous high of 1.0820. An aggressive breakdown below the S2 (1.0785) level and below the 150% line can confirm a drop towards the S2 (1.0741) level and towards the first warning line (wl1) of the descending pitchfork.
- Trading Tips
The bias is bearish as long as the price is below the lower median line (lml) and below the 1.0820 high. Long positions can be opened, if the price stays above the S1 (1.0785) level, if it breaks above the lower median line (lml), and after it makes another high.
Personally, I believe that we'll have a significant move after the eurozone and the US data. A major false breakdown below the near-term support area will validate a potential leg higher for the upcoming period. A further drop will be imminent, if EUR/USD closes right below the support area.
