EUR/USD Price: False Breakdown Through 1.0000 Level, Targeting 1.007

EUR/USD Price: False Breakdown Through 1.0000 Level, Targeting 1.007

  • The bias remains bearish as long as it stays under the downtrend line.
  • The current rebound could bring new short opportunities from around the resistance levels.
  • The US retail sales figures could shake the markets.

The EUR/USD price rallied in the short term as the Dollar Index retreated after its strong rally. It was trading at 1.0045 at the time of writing. Technically, a temporary rebound is natural after its massive drop.

Are you interested to learn more about forex options trading? Check our detailed guide-

The price may come back to test the near-term resistance levels before dropping deeper. The price action signaled exhausted sellers, but it remains to see how it will react after the US data dump. The economic data could shake the markets, so you have to be careful. The bias is bearish, so more declines are in the cards.

Yesterday, the US reported mixed data. The PPI came in better than expected, while the Core PPI and the Unemployment Claims reported worse than expected figures. That’s why the USD depreciated.

Today, the Euro-zone Trade Balance came in at -26.0B versus -34.8B expected. Later, the US Retail Sales may report a 0.9% growth, while the Core Retail Sales are expected to register 0.7% growth. The indicators are seen as high-impact, so the volatility could be huge.

In addition, the Prelim UoM Consumer Sentiment could drop from 50.0 to 49.0 points. Industrial Production is expected to report a 0.1% growth, while the Capacity Utilization Rate could come in at 80.7% versus 79.0% in the previous reporting period.

EUR/USD price technical analysis: Rebounding above parity

EUR/USD price

As you can see on the 4-hour chart, the EUR/USD pair failed to stabilize under the 1.0000 psychological level signaling exhausted sellers. Now, it has stabilized above the weekly S1 (1.0017), and it could try to approach the 1.0071 and the downtrend line, representing upside obstacles.

Are you interested to learn about forex robots? Check our detailed guide-  

As long as it stays under these resistance levels, the EUR/USD pair could drop deeper at any time. Personally, I’ve drawn an ascending pitchfork. The lower median line (LML) acts as a dynamic support. Technically, the rebound could bring new short opportunities. Only a valid breakout above the 1.0071 static resistance and through the downtrend line may signal a more considerable rebound.

Looking to trade forex now? Invest at eToro!

68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money

Olimpiu Tuns

Olimpiu Tuns

Olimpiu Tuns graduated with a Master in Business Administration and is a seasoned Market Analyst / Trader / Trainer with 10 years of experience in the financial markets having expertise in Forex, Commodities, Index, Cryptocurrencies, and Stocks. He worked as a Market Analyst for three major brokerage companies, as a prop trader, and as a contributor/content creator for news portals and educational platforms.