EUR/USD seems unstoppable on the Daily chart, it has crossed above the 1.1200 psychological level and it could approach and reach fresh new highs if the dollar index reaches new lows.
The pair is strongly bullish, the current rally was natural after the breakout from the former extended range and USDX has confirmed a broader drop. EUR/USD is trading at 1.1216, but we'll see at the end of the day, or tomorrow if the price will validate the breakout above 1.12 level.
EUR has received support from the eurozone data earlier, but it remains to see how the pair will react after the US data is released. The ADP Non-Farm Employment Change indicator is expected around -9,000K, the Final Services PMI could increase from 36.9 to 37.2 points, while ISM Non-Manufacturing PMI could climb from 41.8 to 44.2 points. So, better than expected data could save USD from the downtrend and could encourage USDX to gain ground so that EUR/USD could drop.
EUR/USD was expected to increase sharply after the aggressive breakout above the median line (ML) of the descending pitchfork and above the 1.0990 - 1.1000 area. The 1.1200 - 1.1215 zone has represented a first major upside target.
R1 (1.1243) is seen as a potential obstacle as well, so only a breakout above this level will signal a further increase towards the upper median line (UML) of the descending pitchfork. A further increase could be paused only by a false breakout today above the 1.1200 - 1.1215 area.
- EUR/USD Trading Tips
EUR/USD is bullish and it will remain bullish even if we have a minor drop in the short term. The range upside breakout has announced an approx 200 pips growth in the short term, the price has reached a strong resistance zone now, so a false breakout above the 1.1200 - 1.1215 area could signal a bearish momentum.
Maybe it will be better to stay away during the US data release because high volatility could harm your account. It is too late to buy EUR/USD in the short term, a major upwards movement will be confirmed after a valid breakout above the upper median line (UML) of the descending pitchfork.
In the short term, we could sell a pin bar, bearish engulfing, false breakout with great separation above the 1.1200 - 1.1215 area, with a potential downside target at the 1.1 level. If you want to go long again, you should wait for a retreat or for a strong consolidation above the 1.1200 level.
