EUR/USD is moving sideways according to the H1 chart. The pair has a clear direction after a valid breakout from this range. It is trading at 1.1164 level after it has failed to drop in the short term.
As you already know, the Fed has decided to cut the interest rate from 1.25% to 0.25% and to add a QE program, EUR/USD has opened with a gap up. It continues to trade above this gap, a valid breakout above the 1.1200 - 1.1215 area will confirm a further increase.
EUR/USD is trapped between the 38.2% and 61.8% retracement levels. Currently, it is almost approaching the upper median line (uml) which represents strong dynamic resistance. We may have a good long opportunity if the price will make a valid breakout above the upper median line (uml), above the 38.2% and above the 1.1200 - 1.1215 area, the first target is seen at the 1.1448 level.
A larger drop could be confirmed only if the price makes a false breakout above the near-term resistance levels mentioned earlier and if it makes a valid breakdown below the 61.8% retracement level, another low.
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EUR/USD has failed to reach the 61.8% retracement level in the last two attempts, signaling that the corrective phase is finished and a bullish momentum could come. A valid breakout above the 1.1200 - 1.1215 area, above the 38.2% and above the upper median line (uml) will validate a momentum at least till the 1.1448 static resistance, another high.
EUR/USD has decreased as the USDX has rebounded in the short term. A decline on the US dollar index will force the pair to climb higher again. The current rally towards the upper median line (uml) may occur as the pair failed to approach and reach/retest the median line (ml) of the descending pitchfork. EUR/USD could increase significantly because the USD could become very weak after the Fed measures and not because the euro is strong.
