The EUR/USD pair continues to move sideways after failing to activate a deeper drop. Last night, the volatility was huge as the Dollar Index registered sharp moves in both directions. The DXY erased yesterday's gains but it maintains a bullish bias as the Federal Reserve announced that it would end its bond purchases in March, indicating three rate hikes in 2022.
Fundamentally, the USD remains strong and it could try to appreciate. Still, in the short term, the DXY was a little too overbought to be able to resume its upwards movement. Today, the volatility will be high as the ECB, SNB, and BOE could have an impact on the DXY. Also, the German Flash Manufacturing PMI could drop from 57.4 to 57.0 while the German Flash Services PMI is expected to drop from 52.7 points to 50.9 points. The Euro-zone Flash Manufacturing PMI and the Flash Services PMI will be released as well.
In addition, the US is to release its Unemployment Claims, Industrial Production, Flash Services PMI, and the Flash Manufacturing PMI.
EUR/USD Still Undecided!
EUR/USD registered only a false breakdown with great separation below the ascending pitchfork's lower median line (lml) and under the 1.1239 - 1.1227 support area. It has changed little in the last hours, the bearish pressure remains high as long as it stays under the downtrend line. Let's hope that the ECB could help the pair to escape from this narrow range, from the triangle pattern.
Hawkish ECB could push the EUR/USD rate above the downtrend line. A valid breakout above the downtrend line, 1.1300, and above the triangle's resistance could announce potential further growth.
EUR/USD Outlook!
A larger downside movement could be activated only by a bearish closure below the 1.1222 yesterday's low. On the other hand, a valid breakout above the downtrend line could announce strong upside pressure. Still, in my opinion, only a valid breakout above 1.1382 high could activate an upside reversal!
