EUR/USD Lifted by USDX’s Drop!| KOL Analysis•Olimpiu Tuns

EUR/USD is traded at 1.1289 level and it seems determined to resume its upside movement after a short term consolidation. The greenback depreciates as the USDX plunges again in the short term.

A USDX‘s further decline will boost the EUR/USD, the pair is almost to take out a major dynamic resistance, this scenario will attract more buyers. Only a USDX’s rebound will push EUR/USD down.

The dollar needs strong support from the US economy to recover, the ISM Non-Manufacturing PMI will be released today and it is expected to increase from 45.4 to 50.0 points in June, a major increase, expansion, could help the USD to increase and to recapture ground till the end of the day.

Also, the US Final Services PMI could climb from 46.7 to 47.0 points, worse than expected figures today could validate the USDs decline in the upcoming period. The pair is challenging a strong dynamic resistance, so only a valid breakout will bring a long opportunity.

● USDX Drops Like A Rock

The US Dollar Index has found strong resistance at the 61.8% retracement level, failing to reach the upper median line (UML) of the major descending pitchfork. It has also failed to reach the median line (ml) of the sideways orange pitchfork signaling a bearish pressure in the short term.

Still, I believe that the dollar index will touch the upper median line (UML) sooner or later, when it will end the current drop. I‘ve said in my previous analysis that we’ll have a bullish reversal on the USDX if the rate will make a valid breakout above the upper median line (UML).

The bearish pressure is still high as long as the price is traded within the descending pitchforks body, a larger drop will signal the EUR/USD broader increase.

● EUR/USD Breakout Attempt

EUR/USD has come back higher and now is challenging the upper median line (UML) of the descending pitchfork, a valid breakout above this dynamic resistance will validate a further increase towards R1 (1.1403), and towards the 1.1494 high.

The several false breakdowns below the 1.1200 psychological level have signaled that the bulls are still very strong on the Daily chart. The outlook is bullish as long as the price is traded above the 1.1200 level.

You should wait for a valid breakout before going long, another false breakout above the UML will suggest selling because most likely EUR/USD will decline and will stabilize below the 1.1200 level.

The current sideways movement could represent a continuation pattern in the short term, the R2 (1.1573) is seen as a potential target as well if the rate will close and stabilize right above the upper median line (UML).

On the other hand, another false breakout above the UML and a valid breakdown below the 1.1200 will open the door for a further decline towards the 1.1 level, or even lower, the median line could attract the price if it stays within the pitchforks body.

[About The Author]

Olimpiu Tuns

is a seasoned market analyst / trader / trainer on the financial

markets with expertise in forex, cryptocurrencies, commodities, futures,

options, index, CFD for more than 8 years. He is also a famous blogger

in both technical and fundamental analysis, trading signals, trade

setups, etc.

He

has worked as a Market Analyst / Consultant for three major Brokerage

companies, Admiral Markets, MultiBank Exchange Group and InstaForex

(live webinars, market analysis, educational materials, video analysis,

video tutorials, ghostwriting, content creator), as a Social Media

Manager and as a Financial Markets & Crypto Analyst / Contributor

for very important news portals/blogs (investing.com, benzinga.com,

forexalchemy.com actionforex.com, countingpips.com), websites,

educational platforms (Forex.Academy, Forex.Today), independent clients,

etc.

Olimpiu Tuns currently works as a Financial Markets & Crypto Analyst / Signal Provider / Trader / Trainer.

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