EUR/USD Facing Tough Resistance| Daily Forex Analysis•Olimpiu Tuns

EUR/USD is trading in the green ahead of the Euro-zone and the US Manufacturing and Services data, the outlook is still bullish, even if the pair has reached a dynamic resistance. It is traded at 1.1612, below 1.1628 yesterday‘s high, A USDX’s further drop will push EUR/USD higher.

The currency pair is bullish, but it remains to see how it will react after the Euro-zone economic figures will be released, the Flash Manufacturing PMI is expected to increase from 47.4 to 50.0 in July, while the Flash Services PMI could jump from 48.3 points to 51.0 points in the current month signaling expansion.

The German Flash Manufacturing PMI could stay in the contraction territory, the indicator could increase from 45.2 to 48.0 points, but the Flash Services PMI is expected to reach the 50.4 points, versus 47.3 points in June. The French Flash Manufacturing PMI and the Flash Services PMI data will be released as well, so you should be careful because the volatility will grow around these releases.

I believe that EUR/USD could decrease a little in the short term, only if the mentioned economic data will come in worse than expected, better than expected figures will boost the EUR.

● EUR/USD Challenging Dynamic Resistance!

EUR/USD has reached the first warning line (WL1) of the descending pitchfork, it has failed to pass above it in the first attempt, but the rate could still take out this resistance if the US Dollar Index will continue to drop.

A rejection from the WL1 or a false breakout with great separation above this dynamic resistance will send EUR/USD towards 1.1495 static support in the short term. On the other hand, a valid breakout above the first warning line (WL1) will suggest further growth, the 250% Fibonacci line could be used as an upside target.

You should keep an eye on the economic calendar today as the US will release significant figures as well, the Flash Services PMI is expected to increase from 47.9 points to 51.0 points, in the meantime, the Flash Manufacturing PMI could climb from 49.8 to 52.0 points, announcing an expansion. The New Home Sales economic indicator could increase from 676K to 700K in June.

EUR/USD could turn to the downside in the short term only if the USDX will rebound after the Euro-zone and the US data.

● USDX At Confluence Area!

The USDX has reached the confluence area formed at the intersection between the 50% Fibonacci line with the 94.65 static support, a false breakdown below this area will signal a rebound, while a valid breakdown will confirm continuation towards fresh new lows.

The USD needs strong support to be able to rebound in the short term versus its rivals, the US Dolar Index is pressuring a critical support area, confluence zone, so this is a perfect moment for a bounce-back and for bullish momentum.

Only a USDX‘s rally in the short term will suggest a EUR/USD decline from the warning line (WL1), the index’s valid breakdown through the confluence area will force EUR/USD to make a valid breakout above the WL1 and to resume its upside journey in the upcoming period.

{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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