EUR/USD dropped aggressively after the ECB policy decision, but the pair seems determined to stay higher. The euro lost ground versus the USD after the European Central Bank decision to add more stimulus measures to fight the coronavirus effects.
The price decreased as much as 1.1055, but it closed yesterday's session at 1.1166. Now, it is trading near the 1.1200 psychological level as the USDX has decreased a little. EUR/USD has plunged as the USDX has rallied on the short term.
EUR/USD is trapped within a downward channel, between the inside sliding line (sl) and the upper median line (uml) of the descending pitchfork. You can notice that it has registered only a false breakdown with a huge separation, the price has reached the median line (ml), but it has closed inside the down channel's body, signaling that we may have a bullish momentum on the short term.
The bias is bearish as long as the price stays within the descending channel's body, the price could come back down to retest the 50% retracement level and the inside sliding line (sl) before it will breakout from this pattern.
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EUR/USD is testing the 1.1200 - 1.1215 resistance area, a minor drop followed by a valid breakout above this obstacle and above the upper median line (uml) will confirm a potentially significant upside movement. Personally, I would like to see another drop again because another rejection from the near-term support levels will really announce a bullish movement.
EUR/USD was almost to reach the 61.8% retracement level, but it has failed as the bulls are still in the game. So, a valid breakout above the 1.1200 - 1.1215 area, above the 38.2% and above the upper median line (uml) will confirm a further increase, the major resistance stands at 1.1448 level, only a valid breakout above this obstacle will validate a larger upside movement.
The corrective phase will resume only if EUR/USD decreases and if it closes and stabilizes below the 61.8% retracement level and below the inside sliding line (sl). If this scenario takes shape, EUR/USD could drop below the median line (ml) as well and maybe it will approach the 1.0777 static support.
