EUR/USD is trading in the green at 1.2118 level and is fighting hard to recover after the last bearish momentum. The price drops as the USD is weakened by the USDX's current decline. Still, the pair could register only a temporary increase before dropping deeper.
It could come back higher only to test and retest the near-term resistance levels before going down again. Fundamentally, EUR could continue to increase during the day as the Euro-zone ZEW Economic Sentiment and the German ZEW Economic Sentiment have beaten expectations.
EUR/USD Deeper Correction Ahead!
EUR/USD found strong support right on the 38.2% retracement level and now is almost to reach and retest the Pivot Point (1.2125) level. Technically, its failure to reach the lower median lines (lml, LML) signals that the current rally could be only a temporary one before the price turns back to the downside and reaches these levels.
Personally, I believe that the bearish bias will remain intact as long as EUR/USD stays below the descending pitchfork's median line (ML). Furthermore, dropping from the ascending pitchfork's body and below 1.2053 signals more declines.
Forecast!
Sell a valid breakdown through the ascending pitchfork's lower median line (LML) and a new lower low, drop below the 38.2% retracement level. This scenario signals a further drop towards the 1.19 psychological level.
Going long it's risky right now, only a reversal pattern on the lower median line (lml) or on the 38.2% could announce a broader growth and could bring a long opportunity. Also, jumping and stabilizing above 1.23 suggests buying.
