- EUR/USD price escaping from the current range may bring us a clear direction.
- The US data should move the rate tomorrow.
- False breakouts through the upper median line (uml) signals an overbought.
The EUR/USD price is trading in the red at 1.0843 at the time of writing and it seems overbought. It has rallied in the short term as US dollar remains weak.
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On Friday, the US ISM Manufacturing PMI, Revised UoM Consumer Sentiment, ISM Manufacturing Prices, and Construction Spending came in worse than expected.
On the other hand, the Eurozone CPI Flash Estimate and Core CPI Flash Estimate came in better than expected.
Today, the Switzerland Consumer Price Index reported a 0.6% growth, beating the 0.5% growth estimated and the 0.2% growth in the previous reporting period, but the impact was insignificant on the EUR/USD pair.
The greenback took the lead and dragged the price down again even though the Spanish Unemployment Change and Sentix Investor Confidence came in better than expected.
Tomorrow, the Eurozone Final Services PMI is expected to remain at 50.0, the PPI may result in a 0.1% drop, while the German Final Services PMI could be reported at 48.2 points again.
Furthermore, the US data could bring life to the EUR/USD pair. The ISM Services PMI could drop from 53.4 points to 52.9 points, while the Factory Orders may announce a 0.3% growth after a 0.2% growth in the previous reporting period.
EUR/USD Price Technical Analysis: False Breakout
The EUR/USD price found support at 1.0802 and then turned to the upside. Now, it has tested the major descending pitchfork’s upper median line (uml), registering only false breakouts.
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Technically, we have a strong supply zone right above this dynamic resistance and under the 1.0865.
The price action signaled exhausted buyers, but a new leg down needs strong confirmation. The pair remains trapped between 1.0802 and 1.0865 in the short term. So, it could extend the sideways movement. Only escaping from this formation brings a clear direction.
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