The EUR/USD  increased in the second part of the day and erased the morning losses as the USDX has shown some exhaustion signs and has slipped lower.  The currency pair moves in range on the short term, so we have to be patient till we’ll really have a clear direction on the short term.

Price looks determined to increase on the short term after a false breakdown below an important dynamic support. I’ve said in the yesterday’s reports that the USDX seems a little exhausted and could decrease a little in the upcoming days. USDX is trading in the red at this moment, it has erased the morning gains and could close the day below an important dynamic support.

I’ve added the USDX’s daily chart to show you better what’s happening with the USD and what are the perspectives. You can see that has increased further today and has reached the 93.81 horizontal resistance, but failed to stay near this level and above the sliding line (sl) of the minor ascending pitchfork.

I’ve said yesterday that I’m not very confident that the USDX will have enough directional energy to make a valid breakout above the 93.81 level at this moment before will drop again to recapture more energy.

The retest of the sliding line (sl) followed by a minor drop will force the price to drop towards the 92.49 static support. You can see that the USDX ha developed an Inverse Head and Shoulders, but this pattern will be confirmed only after a valid breakout above the 93.81 static resistance.

The rate increased and looks like that we’ll have a false breakdown below the median line (ml) of the minor descending pitchfork. The failure to close on the median line (ml) signals bounce back on the short term, it could climb toward the median line (ML) of the ascending pitchfork and towards the upper median line (uml) of the descending pitchfork. It could be attracted by the confluence area formed between the ML and the upper median line (ml).