EUR/USD is trading in the green at 1.1752 level. Technically, it has shown some oversold signals, and now it tries to come back higher. It has escaped from the Falling Wedge pattern signaling a bullish reversal in the short term.
The German ifo Business Climate dropped from 100.7 to 99.4 points, below 100.2 expected. Surprisingly or not, EUR/USD has rallied in the last three hours despite the US data came in better than expected. The Durable Goods Orders dropped by only 0.1% while specialists predicted a 0.3% drop. At the same time, the Core Durable Goods Orders increased by 0.7%, exceeding the 0.5% estimate.
EUR/USD Falling Wedge breakout
EUR/USD has increased significantly after registering major bullish engulfing on the Ascending Pitchfork's lower median line (lml). The price action and the RSI have shown a bullish divergence.
As the price failed to stabilize under the 50% Fibonacci line of the major Descending Pitchfork, it indicates that EUR/USD may come higher towards the upper median line (UML). It has failed to test and retest the weekly pivot point (1.1721) signaling strong buyers in the short term.
The R1 (1.1778) and the median line (ml) are seen as immediate targets. The pair is likely to rise as long as it stays above the pivot point and within the Ascending Pitchfork's body.
Outlook
Making a valid breakout through the R1 (1.1778) and the median line (ml) of the Ascending Pitchfork could signal a strong growth towards the upper median line (UML). The upside scenario could be invalidated if EUR/USD registers a valid breakout below the Ascending Pitchfork's lower median line (lml).
