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  • The EUR/USD pair rebounded as the Dollar Index plunged.
  • False breakouts above the near-term resistance levels could announce a new sell-off.
  • The currency pair found support on the LML, and now it tries to reach the ML.

The EUR/USD price rallied in the short term as the Dollar Index plunged after registering strong growth. After its massive drop, the currency pair rebounded, which was natural.

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Still, this could be only temporary growth. Personally, I will search for new short opportunities after this leg higher ends. The pair is trading at 1.0972 at the time of writing. The EUR/USD could test the immediate resistance levels before coming back down. Yesterday, the Euro received a helping hand from the German Industrial Production, which registered a 2.7% growth versus 0.5% expected. On the other hand, the US Trade Balance weighed the USD, which dropped unexpectedly lower from -82.0B to -89.7B below -87.5B. Today, the French Final Private Payrolls came in better than expected while the Italian Industrial Production registered a 3.4% drop compared to 0.6% fell expected.

Later, the JOLTS Job Openings indicator is a high-impact event and is expected to rise from 10.93M to 10.96M, which could be good for the greenback. Still, the ECB and the US inflation data publication represent the week’s most important events. Tomorrow, the volatility could be high around these events and releases. That’s why you have to be careful.

EUR/USD price technical analysis: Bounce back

eur/usd price

The EUR/USD pair remained supported by the descending pitchfork’s lower median line (LML). It has registered only a false breakdown with great rejection and rebounded. However, as you can see on the 4-hour chart, the price failed to stabilize above the 23.6% (1.0980) retracement level, signaling that the bulls are exhausted. 1.0990 – 1.1019 area represents a resistance zone.

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Also, the descending pitchfork’s median line (ML) stands as a dynamic resistance. It remains to see how the rate will react after reaching the upside obstacles. False breakouts could confirm that the swing higher is over and that the price could decrease. On the other hand, only a valid breakout could activate a serious recovery.

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