The EUR/USD pair rallied in the short term as the Dollar Index plunged. Still, the throwback could be over soon if the near-term resistance levels continue to hold. Technically, a temporary bounce back was expected after its massive drop.
Today, the Euro received a helping hand from the Eurozone Industrial Production rose by 1.2% versus 0.4% expected. EUR/USD climbed as much as 1.1395 earlier, registering a new high even if the US data came in better than expected.
The US Retail Sales rose by 3.8% versus 2.1% expected, while the Core Retail Sales surged by 3.3% compared to 1.0% expected. In addition, the Industrial Production and the Capacity Utilization Rate reported better than expected data as well. Also, the FOMC Minutes confirmed that the FED is ready to hike rates in March.
EUR/USD Temporary Rebound!
EUR/USD found support on the 50% retracement level and on the median line (ML). Now, it has rebounded and it challenges the weekly pivot point of 1.1390 and the upside 50% Fibonacci line of the ascending pitchfork.
As long as it stays under these levels and below the 23.6% (1.1397), EUR/USD could turn to the downside. Registering only false breakouts may signal a potential new sell-off. A valid breakout above 1.14 psychological level may announce an upside continuation.
EUR/USD Outlook!
Only false breakouts through the 1.1390 weekly pivot point could bring new short-term selling opportunities. The median line (ML) stands as a potential downside target. If you'll take a look at lower time frames, the current rebound could represent only a flag pattern or a Rising Wedge. A larger downside movement could be activated by a valid breakdown below the median line.
