EUR/USD Faked The Breakout Before ECB!|KOL Analysis•Olimpiu Tuns

EUR/USD rallies and tries to resume yesterday‘s growth. It’s traded at 1.1831 level right below 1.1834 yesterday‘s high. USD loses ground again as the USDX slips lower. The bullish outlook remains intact after the failure to get out of the up channel’s body.

It remains to see how the pair will react after the ECB later today. The European Central Bank is expected to maintain its monetary policy unchanged. The ECB Press Conference could shake the markets if Christine Lagarde announces new stimulus measures in the coming meetings.

The US Unemployment Claims could come around 838K in the previous week, the PPI and the Core PPI could increase by 0.2% in August, while the Final Wholesale Inventories could drop by 0.1%.

● EUR/USD Upside Intact!

EUR/USD dropped below the 1.18 but it has failed to stabilize below this static support. It has only retested the channels upside line and now has turned to the upside again. As you already know from my analyses, only a drop below 1.17 validates a corrective phase and suggests selling.

The outlook is bullish as long as the rate stays within the up channels body and above 1.18 psychological level. A valid breakout above the second warning line (WL2) would signal a further bullish run above 1.2 level.

Stochastic and RSI show a bearish divergence but this is not enough for us to consider going short. An upside breakout from the current channel should bring a sharp rally towards the 350% Fibonacci line and up to the third warning line WL3.

It‘s premature to talk about a corrective phase as long as the rate is traded far above the 1.17 critical support. Still, a downside breakout of the channel’s support could lead the rate below 1.17 and could validate the leg lower.

● US Dollar Index Temporary Drop？

USDX drops and it could come back to retest the Falling Wedges resistance soon. 92.55 is seen as immediate static support. Technically, the index was expected to climb higher after escaping from the minor chart pattern and after breaking above the 50% Fibonacci line.

The current drop could still be a temporary one and the rate could jump towards the upper median line (UML) of the major descending pitchfork. Another higher high, fly above 93.65 could signal a breakout above the UML.

A bullish reversal would be validated if USDX will jump and stabilize above the upper median line (UML). The medium to the long term bias is bearish as long as the index stays below the 93.81 and below the UML.

● GBP/USD Selling Signal？

GBP/USD has fallen below the 1.3066 (78.6%) level and below the median line (ML) signaling further drop. Ive told you in my previous analyses that the pair will be bullish as long as it stays above the mentioned levels.

The aggressive breakdown suggests selling after the current retest. So, a false breakout or rejection from the median line (ML) and from the 78.6% retracement level confirms a deeper drop. The 61.8% (1.2712) and the 50% Fibonacci line are seen as potential downside targets.

{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 / Trader / Trainer / Portfolio Manager.

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