The EUR/USD rallied today and resumed the minor bounce back. Is strongly bullish and seems poised to climb much higher in the upcoming period if will close the day somewhere above the 1.1700 psychological level. The USD drops versus all its rivals as the USDX is going down as the near term support weren’t able to stop the bearish movement.
The dollar index is trading in the red on the short term and should hit the 94.00 psychological level very soon. It should reach a dynamic support as well, but the next major downside target will be at the 93.81 static support, only a valid breakdown below this level will signal a larger drop and a broader USD’s depreciation.
Euro increased on the mixed Euro-zone data, the German Prelim GDP increased by 0.8%, beating the 0.6% estimate and the 0.6% growth in the former reading period, while the German Final CPI rose by 0.0%, matching expectations.
Euro-zone ZEW Economic Sentiment increased from 26.7 to 30.9 points, beating the 29.3 estimate, while the Industrial Production dropped by 0.6%, matching expectations. The Flash GDP increased by 0.6%, has come in line with expectations, but the German ZEW Economic Sentiment failed to reach the 19.8 estimate, it was reported at 18.7 points.
The currency pair rallied and jumped through the major confluence area formed between the median line (ml) of the minor descending pitchfork with the lower median line (lml) of the ascending pitchfork and with the short black line. A valid breakout above the confluence area will accelerate the upside movement. We may have a buying opportunity if the rate will retest the lower median line (lml) of the ascending pitchfork.
The next upside target will be at the upper median line (uml) of the minor descending pitchfork and the next one at the median line (ml) of the ascending pitchfork. Price turned to the upside and invalidated the Head and Shoulders pattern, but a larger increase will be confirmed only after a valid breakout outside the descending pitchfork’s body.