EUR/USD is trading in the red after another false breakout from the extended sideways movement. The US Flash Manufacturing PMI increased from 36.1 points to 39.8 points, beating the 39.3 estimates, while the Flash Services PMI was reported at 36.9, higher versus the 32.6 forecasts.
The USD has taken the lead again after the US numbers have come in better than expected, even if the eurozone figures were good as well. EUR/USD dropped as the USDX has rallied and it is extending yesterday's growth.
The pair has registered only a false breakout above the 1.1 psychological level and above the median line (ML) of the descending pitchfork. I said yesterday that a false breakout will send the price down towards the $1.0777 static support again.
EUR/USD is trading within the extended range, so we'll have a great trading opportunity when the price registers a valid breakout from this pattern. Now, it is about to reach the Pivot Point at 1.0905 level, a valid breakdown will signal a further drop in the short term.
The price is under selling pressure as long as it stays below the median line (ML) of the black descending pitchfork. EUR/USD is accelerating its sell-off, but you should be very careful because we cannot exclude another increase and breakout attempt above the median line (ML) in the short term.
- EUR/USD TRADING TIPS
Long above the 1.1008 yesterday's high if EUR/USD makes a valid breakout above the median line (ML) and above the 1.1 level. The potential upside breakout will validate an increase towards the 1.1200 level and higher towards the upper median line (UML).
EUR/USD is bearish and the outlook will remain the same as long as the price is traded below the median line (ML). Another median line (ML) retest or another false breakout will definitely confirm a broader drop. However, a great selling opportunity will be suggested by a valid breakdown below the 1.0777 level and below the S1 (1.0772), the lower median line (LML) and S2 (1.0593) level could be used as downside targets.
