EUR/USD: Is This Another False Breakout?
MultiBank Exchange Group | Jul 13, 2017 03:23AM ET
EUR/USD seems exhausted
The currency pair increased in the morning, trying to recover after yesterday’s drop, approaching an important confluence area, where it could find resistance again. Price increases as the USDX is under massive selling pressure. The index is approaching the 95.50 psychological level. A drop below the 95.45 previous low will invalidate a rebound at this moment.
I’ve said in the last days that the USDX could continue to drop on the short term because it could still be attracted by a major dynamic support before it will really have enough bullish energy to start a broader upside movement.
The German Final CPI rose by 0.2%, matching expectations, while the French Final CPI may increase by 0.0%. We have a busy calendar today, so it will be better to keep an eye on it as the US is to release high impact data, which will bring life into the EUR/USD.
Price increased and is very close to reach the confluence formed by the median line (ML) with the 1.1466 static resistance. We could have a trading opportunity from there. A valid breakout through this area will accelerate the rally, while a rejection will bring us a very good selling opportunity. Technically, another leg lower is favored after another false breakout above the median line (ML) and above the sliding line (sl). A strong selling opportunity will come if the Rising Wedge pattern will be confirmed.
EUR/GBP breakout needs confirmation
EUR/GBP dropped sharply in yesterday’s session and now is pressuring a broken dynamic resistance. This could be confirmed as a strong support if it will hold. We may have a buying opportunity these days if the price stays much above the previous extended sideways movement.
EUR/GBP is pressuring the broken warning line (wl2), so we still need a confirmation to resume the upside movement. We could have a buying opportunity if the rate will come down to test the confluence area formed by the median line (ML) with the warning line (wl2). The upside targets are at the 50% Fibonacci line (ascending dotted line), at the 0.9226 swing high and at the upper median line (UML) of the ascending pitchfork.
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EUR/CHF upside paused
EUR/CHF decreased in yesterday’s trading session and could come back down to test and retest some important support levels before it tries to climb towards new peaks. EUR/CHF has found strong resistance at a confluence area and now is into a corrective phase. The current retreat is natural after the impressive rally, dropping as much as 1.0997 level, but now it's trading much above the 1.1000 psychological level.
The confluence formed by the upper median line was rejected (UML) with the median line (ml), which could retest the WL1 and the lower median line (lml) of the ascending pitchfork in the upcoming days. The outlook remains bullish on the short term despite the minor retreat.
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