EUR/USD Forecast: Correction Stopped By 1.1624 Support

EUR/USD Forecast: Correction Stopped By 1.1624 Support

  •  The EUR/USD pair maintains a bullish bias as long as it stays within the up channel’s pattern. 
  • Escaping from the current flag could bring new long opportunities.
  • The upper median line (UML) is seen as an upside target if the pair resumes its growth.

Our EUR/USD forecast remains bullish despite the most recent decline. After its amazing rally, a temporary drop was expected. The temporary drop is seen as a continuation pattern. The price action developed a flag formation. Escaping from this pattern may signal further growth in the short term.

Fundamentally, the Euro is still strong after good Eurozone data reported today. The Final CPI registered a 3.4% growth as expected, while the Final Core CPI rose by 1.9% matching expectations. Furthermore, the German PPI surged by 2.3% beating the 1.1% growth expected.

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Only the Eurozone Current Account came in worse than expected at 13.4B below 24.3B expected.  

Tomorrow, the US is to release the Unemployment Claims which is expected at 298K in the previous above 293K. The CB Leading Index and the Existing Home Sales will be released as well. In addition, the Euro-zone Consumer Confidence is expected at -5 points versus -4 points in the former reporting period. 

On Friday, the Euro-zone and the United States Flash Manufacturing PMI and the Flash Services PMI could shake the markets and could have a big impact on the EUR/USD pair. 

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EUR/USD Forecast: Price Technical Analysis – Up Channel

eur/usd forecast

The EUR/USD pair dropped a little within a minor flag. This pattern was seen as a continuation pattern. As you can see, the price has found support, demand, right on the 1.1624 former high. Now it has jumped above the weekly R1 (1.1637) and it challenges the immediate downtrend line.

Making a valid breakout above this dynamic resistance and stabilizing above the R1 could indicate further growth. In the short term, it could climb higher as long as it’s traded within the ascending channel.

The descending pitchfork’s upper median line (UML) is seen as a potential upside target if the rate continues to grow. A larger upwards movement could be confirmed if the EUR/USD pair makes a valid breakout above the upper median line (UML). 

From the technical point of view, the current decline, retreat, was somehow expected after the last bullish momentum and after reaching the up channel’s upside line. 

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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.