The EUR/USD increased a little today and tries to recover after the last two day’s impressive drop. Technically, it looks determined to increase after another false breakdown below an important dynamic support. Price moves sideways on the short term, but I hope that we’ll have a trading opportunity very soon.
The rate has developed a Head and Shoulders pattern, but this is far from being confirmed. We’ll see what will happen in the upcoming hours as the US will release important figures that could shake the price. The USDX needs a helping hand to be able to stabilize above the 93.81 static resistance.
The Euro increased on the mixed Euro-zone data, the Flash Services PMI dropped from 55.8 to 54.9 points, much below the 55.7 estimate, signaling that the expansion has slowed down, while the Flash Manufacturing PMI increased from 58.1 to 58.6, beating the 57.9 estimate. The German Flash Services PMI decreased from 55.6 to 55.2 points and has come much below the 55.5 estimate, while the Flash Manufacturing PMI has come in better than expected, was reported at 60.5 points, much above the 60.1 estimate. The French Flash Services and the Flash Manufacturing economic indicators have come in better than expected and have signaled a further expansion.
The currency pair increased a little after another false breakdown below the median line (ml) of the minor descending pitchfork. Technically it was expected to drop further after the failure to retest the median line (ML) of the ascending pitchfork.The Head and Shoulders pattern will be confirmed only after a valid breakdown below the minor dotted line, which represents the neckline.
A larger drop will be confirmed by a breakout from the ascending pitchfork’s body, but this scenario will happen only if the USDX will have enough energy to consolidate above the 93.81 static resistance and if will resume the upward movement.
However, a USDX’s false breakout above the 93.81 horizontal resistance will send the rate down again and will force the USD to lose significant ground versus all its rivals and not only against the Euro.