The EUR/USD pair climbed as much as 1.0874 today where it has found resistance. Now, it stands at 1.0822 at the time of writing. The price action signaled exhausted buyers as the Dollar Index rebounded.
Fundamentally, the German WPI reported a 1.6% drop today versus the 0.3% drop estimated. Today, the Canadian CPI could have a big impact on the USD as well. In addition, the US Empire State Manufacturing Index, Eurozone ZEW Economic Sentiment, German ZEW Economic Sentiment, and the German Final CPI could move the price.
EUR/USD Overbought!
Technically, the EUR/USD pair registered only a false breakout above 1.0867 and has now turned to the downside. It has dropped through the uptrend line signaling exhausted buyers and announcing a potential downside movement.
In the short term, it's trapped between the 1.0867 and 1.0780 levels. Escaping from this pattern could bring us great opportunities.
EUR/USD Forecast!
Personally, I've drawn a descending pitchfork, so the upper median line (uml) represents a dynamic resistance. A new lower low, bearish closure below 1.0780 activates more declines and is seen as a bearish signal.
