EUR/USD has extended the upside movement and is now standing above the broken 1.1200 - 1.1215 resistance area. I said in yesterday's analysis (EUR/USD- Bullish Momentum Expected Soon!) that the pair is expected to resume the upside movement if it stabilizes above the 1.1111 level.
The price has rallied as the USD was punished by the USDX's sell-off, the index is trading at 96.57 and it seems determined to approach and reach the 96.00 psychological level. A USDX's further drop will force EUR/USD to reach fresh new highs. The US data could be crucial for the USD's future, some poor figures could validate the EUR/USD reversal and a potential substantial upside movement on the medium to the long term.
The dollar could be saved by good economic numbers, the NFP is expected at 175K, the Unemployment Rate could remain steady at 3.6%, while the Average Hourly Earnings could increase by 0.3% in February.
- EUR/USD Above Major Resistance Area
Technically, EUR/USD is bullish and it should resume the upside movement after the breakout above the second warning line (wl2) and above the 1.1200 - 1.1215 area. MACD is signaling a bearish divergence on the H4 chart, but it is not enough for us to consider a corrective phase and a short position. Personally, I would like to see a consolidation above the broken resistance area before it will try to reach the next upside target from the third warning line (wl3).
EUR/USD has registered only a false breakout above the 100% level, the bearish engulfing has signaled an overbought as well, but as I've just said, the outlook is bullish as long as the price is traded above the 1.1200 level and above the second warning line (wl2). The bearish divergence and the bearish engulfing could signal only a temporary drop, EUR/USD could come back to retest the broken resistance levels before it will move higher.
- TRADING RECOMMENDATIONS & TIPS
EUR/USD will be moved today by the US economic data, the price will increase if the data disappoints, while some good figures will force the price to come back down on the short term. The first upside target is seen at the third warning line (wl3), the first downside target is represented by the second warning line (wl2).
The outlook will remains bullish despite a minor correction, a 1.1200 - 1.1215 and a warning line (wl2) retest could give us a great chance to go long again on this pair. If the bearish divergence will be invalidated, EUR/USD will register an aggressive rally. I've said in my previous analysis that a valid breakout above the 1.1200 - 1.1215 will signal a reversal on the medium to the long term, so maybe we'll get confirmation today, or invalidation if the price will drop and if it will stabilize below the 1.1200 psychological level.
