EUR/USD has been trading sideways in the short term and everyone is wondering if this will be a continuation or reversal pattern. The bias is bullish on the Daily chart, but we still need confirmation that EUR/USD will resume its leg higher.
The pair has increased today but is still trading below a strong dynamic resistance. We'll see what will happen in the upcoming hours and if EUR/USD confirms its direction. EUR/USD increases as the USDX is trading in the red again, only a USDX's rally towards the 98.00 will confirm a sharp drop of EUR/USD.
The US retail sales registered an amazing increase in May, beating analysts' expectations. That's why EUR/USD closed yesterday's session in the red and it has invalidated a further increase, for now.
EUR/USD is trading right below the upper median line (UML) of the descending pitchfork, the pair has failed to close above this dynamic obstacle in yesterday's session signaling an overbought situation. Still, the outlook is bullish as long as the price is trading above the 1.1239 static support (resistance has turned into support).
Only a valid breakdown below the monthly R1 (1.1243) and below the 1.1239 level will signal a further bearish momentum in the short term. On the other hand, an eventually valid breakout above the upper median line (UML), will announce an upside breakout from the range between the R2 (1.1383) and R1 (1.1243) levels.
Yesterday's false breakout above the upper median line (UML) has suggested that we may have an important drop in the short term.
- EUR/USD TRADING TIPS
Another lower low, a drop below the 1.1212, will suggest selling in the short term, the next major downside target is seen around 1.1 psychological level. EUR/USD is under pressure as long as it stays below the upper median line (UML), but only a valid breakdown below the R1 (1.1243) - 1.1239 area will really confirm a further drop towards the monthly PP (1.1005) level.
If you want to buy EUR/USD, you should wait for a larger correction, or for a valid breakout above the R2 (1.1383) level, upside breakout from the minor range. An upside breakout will bring a long opportunity with target at R3 (1.1622) level.
