The EUR/USD pair rallied in the short term and it has managed to escape from the extended range pattern. It has climbed as much as 1.0368 where it has found resistance. Now, it is traded at 1.0310 at the time of writing.
The currency pair registered sharp movements after the US inflation data publication as expected. You knew from my previous analysis that the EUR/USD pair develop strong movements today. The CPI rose by 0.0% growth in July less compared to 0.2% estimates, while the Core CPI registered a 0.3% growth.
Technically, the rate dropped at the time of writing, but it remains to see how it will react tomorrow as the US is to release the PPI which is expected to register a 0.2% growth, the Core PPI, and the Unemployment Claims.
EUR/USD Aggressive Breakout!
From the technical point of view, the rate found resistance at the 1.0353 historical level, failing to reach the weekly R2 (1.0370). Now, it has turned to the downside and it could approach and reach the 1.0269 level again.
It could come back down to test and retest the former highs trying to accumulate more bullish energy, to attract more buyers. After its strong rally, a temporary drop is natural.
Testing and retesting the 1.0269 support, registering only false breakdowns could announce a new bullish momentum. An upside continuation could be activated only by a valid breakout above 1.0353 and through the R2 (1.0370).
In my opinion, only new false breakouts above 1.0353 could bring new short opportunities.