The EUR/USD pair rallies at the time of writing as the Dollar Index drops. DXY failed once again to stabilize above the 103.65 - 103.82 resistance area. After its massive drop, a temporary rebound is natural in the EUR/USD.
Today, the currency pair dropped deeper as the Euro took a hit from the Euro-zone data. German Factory Orders dropped by 4.7% versus 1.0% expected, while the French Industrial Production registered a 0.5% drop compared to 0.2% estimates.
On the other hand, the US Unemployment Claims came in worse than expected at 200K versus 180K expected. Still, the USD received a helping hand from the Prelim Unit Labor Costs and from the Prelim Nonfarm Productivity which came in better than expected.
Tomorrow, the US is to release the NFP, Unemployment Rate, and Average Hourly Earnings. These are seen as high-impact indicators and could really shake the markets.
EUR/USD Bullish Momentum!
As you can see on the H4 chart, the pair is traded within the ascending channel's pattern after registering only a false breakdown. EUR/USD registered a strong sell-off after registering only a false breakout with great separation above the 1.0635 key level. The 1.0572 level stands as the immediate upside obstacle. Technically, the ascending channel represents a potential downside pattern.
In my opinion, the bias remains bearish as long as EUR/USD stays under the weekly pivot point of 1.0610 and under the upper median line (uml) of the descending pitchfork.
EUR/USD Forecast!
Making a valid breakdown below the uptrend line and below 1.0500 could announce more declines. In the short term, the pair could only test and retest the immediate upside obstacles before resuming its drop.
