The EUR/USD has rallied aggressively in the last days and has managed to hit new highs, was strongly bullish after the USDX’s massive drop. Price has climbed above the 1.1262 yesterday’s high, but has found temporary resistance at the 1.1267 level and now is trading in the red.

Price has decreased a little because has touched a very strong dynamic resistance, actually has climbed above this level, but has failed to stay there, signalling an exhaustion on the short term. Could drop much deeper in the upcoming days only if the dollar index will have enough directional energy to rebound on the short term.

The pair has started to decrease in the second part of the day, the Euro-zone data have come in mixed today, the Euro has received support from the German Ifo Business Climate, the indicator has surged from 113.0 to 114.6 points in May, beating the 113.1 estimate, while the German Flash Manufacturing PMI increased from 58.2 to 59.4 points in the current month, exceeding the 58.0 estimate. Moreover the French Flash Services PMI increased from 56.7 points to 58.0 points, beating the 56.8 estimate, while the Euro-zone Flash Manufacturing PMI has resumed the uptrend, was reported at 57.0 points, much higher versus the 56.5 estimate and versus the 56.7 in the previous reporting period.

You can see that the pair has found strong resistance below the median line (ml) of the minor ascending pitchfork has climbed above this major obstacle, but has failed to stay there. A false breakout above the median line (ml) and a failure to to close right on this line could signal an overbought on the short term, so we could see a minor retreat in the upcoming days.

Maintains a bullish perspective, despite a minor drop, could come to retest the lower median line (lml) before will climb much higher, we have an important upside target at the upper median line (uml), will approach this level only if the USDX will slide further.

Could find strong resistance also at the fourth warning line (wl4) of the major descending pitchfork, technically, a minor drop is somehow expected after the impressive rally.