The EUR/USD has increased in the morning, but wasn’t able to reach the 1.0781 Friday’s high as the USD has posted little gains in the previous hours. The greenback is struggling to rebound on the short term, but I’m afraid that will hit new lows in the coming days because the USDX is under massive selling pressure.
The USD has posted humble gains as the USDX has managed to rebound in the last few hours and has recovered a little after the last week drop, the index is trading right above the 100.30 level. The US dollar index has erased the morning losses and now is trying to approach the 100.48 Friday’s high, could come only to test and retest a broken dynamic support before will drop again.
A further USDX’s drop will force the greenback to depreciate versus its rivals, could reach new lows before will start another leg higher, the index could find support at the 99.84 static downside obstacle.
The German PPI rose by 0.2% in February, less versus the 0.4% estimate, has also come in worse compared to the 0.7% growth in the previous reporting period.
The rate has dropped significantly in the last hours and has managed to delete today’s gains, right now is pressuring the sliding parallel line, could test and retest also the lower median line (lml) of the minor ascending pitchfork.
I’ve said in the Friday’s article that the breakout above the outside sliding line needs confirmation because a failure to stabilize above the broken upside line will send the rate down again. However, I’ve said also that we could have a good buying opportunity if the rate will test the confluence area formed at the intersection between the sliding line with the lower median line (lml) of the minor ascending pitchfork.
Personally I’l wait for a fresh trading signal, remains to see what will happen in the coming days because a breakdown below the mentioned support will accelerate the sell-off, but this scenario is less likely to happen right now as the perspective remains somehow bullish on the short term.