EUR/USD Breakout Needs Confirmation!|KOL Analysis•Olimpiu Tuns

EUR/USD is strongly bullish in the short term as the USDX has dropped again, weakening the greenback. The pair has managed to jump right above the 1.18 upside obstacle signaling further growth.

Still, the breakout needs to be confirmed before considering going higher, any reversal pattern here or false breakout with great separation will force EUR/USD to turn to the downside.

Though, the US Dollar needs strong support from the US economy to be able to recover in the short term against its rivals. The US ISM Non-Manufacturing PMI could fall from 57.1 to 55.0 points in July, the Final Services PMI is expected to remain unchanged at 49.6 points for the second month in July, while the Trade Balance indicator may increase a little from -54.6B to -50.3B.

The ADP Non-Farm Employment Change report will be released as well today, the indicator is expected around 1200K in July, versus 2369K in the previous reporting period. Better than expected US figures could spur the USD.

● EUR/USD Above Upside Obstacles!

EUR/USD has opened with a gap up today signaling strong bulls. It is traded above the 1.18 and above the 250% Fibonacci line, a valid breakout will suggest buying with a next potential target at the second warning line (WL2) of the former descending pitchfork.

The price has decreased a little in the short term, but the rejection from the 1.17 has announced that EUR/USD could still resume its upside movement despite the bearish engulfing pattern, the 1.20 is seen as a potential target as well.

EUR/USD is traded at 1.1815 level and it could try to approach the 1.1900 psychological level in the upcoming hours if the US Dollar Index will decline. Only another failure to stabilize above the 1.18 and above the 250% Fibonacci line will announce a corrective phase in the short term and will invalidate a further increase.

An important drop during todays session, another bearish engulfing, could signal that the upside is complete and that EUR/USD could develop a minor correction after the impressive upside momentum. EUR/USD could drop only if the USDX will rebound.

● USDX Undecided!

The US Dollar Index has changed little today, maybe is waiting for the Euro-zone and the US data before reacting. I‘ve said in yesterday’s analysis that the USDX could come back down to retest the inside sliding line (SL1) before going higher.

The pressure is high as long as the index is located below the 93.81 and below the upside 50% Fibonacci line. Some good US data could bring another rejection from the SL1, a drop below this dynamic support will confirm a further decline towards the 92.55 former low and towards the SL2.

● GOLD Above $2,000 Psychological Level!

Gold is traded at $2,030 level and it seems determined to reach fresh new highs. It is almost to reach the 250% Fibonacci line, which is seen as potential dynamic resistance. XAU/USD is strongly bullish, so a further growth towards fresh all-time highs is natural.

I‘ve said in another article, analysis, that the gold price should jump above the $2,000 level if the price will make a valid breakout above the first warning line (WL1) of the former ascending pitchfork. Yesterday’s amazing rally, candle, has suggested that the XAU/USD could resume its upside momentum, the second warning line (WL2) could be used as a potential target as well, along with the $2,100 level.

Gold has opened with a gap up today as well, the USDs drop helped the yellow metal to jump higher. Also, the COVID-19 crisis and the high global risk could attract more buyers on this safe-haven instrument. If you are wondering how long this increase will be, you should know that the outlook will be bullish as long as the rate will stay above the first warning line (WL1).

{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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