The EUR/USD pair crashed today as the Dollar Index rallied. Now, it's located at 1.0728 at the time of writing. You already know from yesterday's analysis that the price action signaled a potential upside reversal. Still, a new swing higher is far from being confirmed.
Fundamentally, the Eurozone Economic Sentiment came in worse than expected, while German ZEW Economic Sentiment and German WPI came in better than expected. On the other hand, the NFIB Small Business Index disappointed.
Tomorrow, the US inflation data should be decisive. The CPI y/y and CPI m/m are expected to report higher inflation in August. This could help the USD to dominate the currency market.
EUR/USD Buyers Still In Game!
From the technical point of view, the rate dropped after registering only a false breakout with great separation through the 1.0759 former high.
Now, it has found support on the lower median line (lml) and is struggling to come back higher. As long as it stays above this dynamic support, the EUR/USD pair could develop a new leg higher.
EUR/USD Outlook!
Consolidating above the lower median line (lml) may announce a new swing higher. Still, only a bullish closure above 1.0759 activates a larger growth. This scenario brings a new buying opportunity.
