EUR/USD seems overbought in the short term and it could develop a bearish momentum if the USDX continues to increase in the upcoming hours. The outlook is still bullish, that's why you should be very careful before taking action.
The US inflation data could bring a sell-off on EUR/USD also if today's US figures will come in line with expectations or better. The PPI, Core PPI, and the Prelim UoM Consumer Sentiment could be decisive today.
EUR/USD Corrective Phase?
The price failed to reach the 1.22 psychological level signaling exhausted buyers. EUR/USD is back within the ascending pitchfork's body after failing to stabilize above the upper median line (uml).
Is moving in a range between 1.2177 and 1.2131 levels, a valid breakout from this pattern brings a trading opportunity. It will be essential to see how the USDX will react after the US data are released.
A valid breakout above the upper median line (uml) and through the 1.22 suggests buying while a drop and stabilization under the Pivot Point (1.2073) level represents a selling signal.
- EUR/USD Trading Tips
Buy it from above the 1.22 level with a first upside target at the R2 (1.2328) level.
Sell a bearish closure under the 1.2059 level and use the 1.2 and 1.19 levels as potential downside targets.
