EUR/USD increased as much as 1.2179 passing above 1.2169 reaching a strong resistance area. The price is trading lower at 1.2157 at the time of writing as the US Dollar Index rebounded in the last hours.
The price slipped lower despite a bullish bias in the short term. The German Ifo Business Climate increased from 90.3 to 92.4 beating 90.5 yesterday. Euro rallied after this indicator was released dragging EUR/USD higher.
We'll see how the pair reacts after Euro-zone Final CPI and Final Core CPI and in the US session when the CB Consumer Confidence will be released. Technically, this could still be only a temporary drop before the rate takes out the immediate resistance area.
EUR/USD Decides Direction!
EUR/USD edged higher after retesting the PP (1.2101), 1.2100 psychological level, reaching the descending pitchfork's upper median line (UML). It was almost to reach the R1 (1.2181) as well but it has registered only a false breakout above the 23.6% level.
Selling from here could be risky without getting a clear bearish signal. Personally, I believe that EUR/USD will challenge the upper median line (UML) again before deciding the direction. A valid breakout above the UML and through the R1 (1.2181) represents a long signal, while a false breakout with great separation or a major bearish engulfing could bring a selling opportunity.
EUR/USD will register a significant sell-off only if USDX will come back higher approaching and reaching 91.00.
Forecast & Tips!
Buy EUR/USD if the rate jumps above UML and R1 and if it closes above 1.22 psychological level. Such a breakout activates a further growth towards 1.23 and 1.24 levels.
Selling will be possible if EUR/USD makes a false breakout with great separation above UML or if it prints a bearish engulfing on this dynamic resistance.