Price decreased today and corrects after the Friday’s rally, is moving somehow sideways on the short term, is consolidating, so we may see a significant move in the upcoming period. However, remains to see if this is a distribution or an accumulation movement, so will be better to stay away till we’ll have a fresh trading signal.

EUR/USD dropped a little as the USDX posted some gains today, but the pair could increase again as the dollar index remains under selling pressure on the short term. The USDX is pressuring a dynamic support, so a valid breakdown wil open the door for more declines, the greenback will lose significant ground versus the European currency if the index slides further.

The USDX extends the minor sell-off after as the United States data was released, the figures have disappointed, so the greenback could drop significantly versus all its rivals in the upcoming hours. The European currency could drive the rate higher also because the German Ifo Business Climate increased from 114.6 to 115.1 points in June, beating the 114.7 estimate. The ECB President Draghi will speak later at the European Central Forum on Central Banking, in Portugal, but I don’t believe that will have a significant impact.

Price rallied right after the US data were sent to the public and now is very close to hit the fourth warning line (WL4) of the former descending pitchfork, this represents a very strong dynamic resistance, only a valid breakout above this level will confirm a further increase. We may have a buying opportunity if the rate will take out the resistance from the WL4, personally I would like if the rate will jump above and if will come back to retest the WL4 and the lower median line (lml) of the ascending pitchfork.

A major drop will be confirmed if the rate will drop and will stabilize outside the ascending pitchfork’s body, right now only a rejection from the WL4 will send the rate much deeper in the upcoming period, but as I’ve said, we have to wait for a confirmation before we take action.