EUR/USD Under Short-Term Pressure!|KOL Analysis•Olimpiu Tuns

At the time of writing, EUR/USD is traded lower at 1.1905 versus 1.2012 yesterdays high. It has registered a false breakout with great separation above the near-term resistance levels, so we cannot exclude a temporary decline.

Still, a down reversal is far from being confirmed, yesterday‘s pin bar (reversal candle) could be invalidated by a strong bullish candle today. USD recovered after the ISM Manufacturing PMI indicator was released. August’s ISM Manufacturing index increased more than expected to 56.0 points signaling further expansion.

The US is to release the ADP Non-Farm Employment Change later today. The indicator is expected around 1250K jobs in August, versus 167K in July. Moreover, Factory Orders could rose by 6.0% and could support the USDs rebound.

● EUR/USD Bearish Reversal？

EUR/USD failed to close above the second warning line (WL2), and above the confluence area formed at the intersection between 1.2000 level with the upside line of the up channel. A bearish closure today would announce a potential further drop towards 1.18 psychological level.

The pair remains trapped within the minor up channel. RSI indicates a bearish divergence according to the Daily chart, but only a valid breakdown from this channel and below 1.18 will suggest selling.

EUR/USD turned to the downside as the USDX has bounced back since yesterday. You should be careful because some poor data reported by the ADP Non-Farm Employment Change could ruin the bearish scenario.

This could be a crucial week for the USD, the Non-Farm Payrolls, Unemployment Rate, Average Hourly Earnings, and the ISM Non-Manufacturing PMI data will be decisive and will give us a clear direction.

A valid breakout above the second warning line (WL2) after the release of these high impact economic indicators will suggest buying as EUR/USD should resume its upside movement. On the other hand, a valid breakout below the channels downside line and below 1.18 could announce a strong corrective phase.

Technically, a drop below 1.17 level could validate a bearish reversal, while a breakout of 1.2 brings another long opportunity.

● USDX Bounced Back!

As you can see on the Daily chart, the US Dollar Index has found support on the sliding line (SL1) again signaling a temporary rebound. RSI indicates a bullish divergence but the selling pressure remains high as long as the index stands below the 50% Fibonacci line (descending dotted line).

92.55 static support turned into resistance, so only an aggressive breakout above it and above the 50% Fibonacci line could signal a broader recovery up to 93.81. A rejection from 92.55 followed by a bearish candle will invalidate a potential leg higher and will suggest further downside movement.

● GBP/USD Upside Paused!

GBP/USD maintains a bullish outlook despite today‘s drop. Yesterday, the rate was almost to reach 100% (1.3517) upside target, but the USDX’s rebound has erased some of yesterdays gains.

Technically, the bias will remain bullish as long as it stays above 1.3269. A temporary drop could give us a great chance to go long again with target at the 50% Fibonacci line.

{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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