EUR/USD resumed the upside momentum and now has reached another upside target. The current bullish movement is natural and it was expected because the USDX has dropped further on the short term.

I’ve told you in the previous reports that the pair should climb much higher on the short term because the dollar index should approach the 94.50 and the 94.00 psychological level. The dollar needs a bullish spark to be able to recover a little. It remains to see how it will react later after the US data will be published. The Goods Trade Balance could be reported at -68.6B, much below the -67.9B in the previous reading period, while the Prelim Wholesale Inventories could increase by 0.1%. The CB Consumer Confidence could drop from 127.4 to 126.6 points, while the Richmond Manufacturing Index could drop to 18 points, from 20 in the previous reading period.

I’ve added the USDX’s chart to show you why the USD could drop further versus all its rivals. You can see that it has retested the upside 50% Fibonacci line of the ascending pitchfork. A further drop towards the median line (ml) will force the EUR/USD to increase further on the short term, so maybe it will reach at least the 1.1800 psychological level.

The rate has passed above the downside 50% Fibonacci line of the descending pitchfork and now is pressuring the upside 50% Fibonacci line of the minor ascending pitchfork. A valid breakout will signal a further increase towards the upper median line (uml) of the minor ascending pitchfork and towards the median line (ML).

I’ve told you that the perspective will remain bullish as long as the rate will stay and stabilize above the median line (ml). We had only a false breakdown below the median line (ml), so is it somehow expected to increase further.