EUR/USD increased today and seems determined to test a broken dynamic support before will drop much deeper. The rebound was somehow expected after the failure to make a valid breakdown below a very important dynamic obstacle.

Price increased, but this could be only a temporary rebound because the perspective remains bearish on the short term as the USDX it is still expected to jump much higher in the upcoming period. EUR/USD could extend the downside movement if it will have enough bearish energy to make a valid breakdown below the near-term dynamic support.

Only a USDX’s massive drop will send the EUR/USD much deeper in the upcoming weeks, but this is less likely to happen because the index has made a crucial breakout in the previous days.

The EUR could slip lower as the Euro-zone data have disappointed earlier, the Tade Balance has decreased from 16.9B to 16.7B, even if the traders have expected to see an increase to 17.0B. The German WPI increased only by 0.0%, less versus the 0.5% estimate and versus the 0.5% growth in the former reading period.

The US is to release very important data later, the Unemployment Claims could increase from 213K to 215K in the previous month. The Building Permits and the Housing  Starts could increase as well, while the Philly Fed Manufacturing Index could decrease from 25.7 to 21.9 points.

You can see on the Daily chart that the rate has failed to make a valid breakdown below the lower median line (LML) of the major ascending pitchfork and now could test and retest the lower median line (lml) of the minor descending pitchfork. The rebound could be temporary, so, it the rate will make a valid breakdown below the LML, then you can go short on this pair again.