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EUR/USD Another False Breakout! What Now?
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EUR/USD is traded at 1.1238 level and continues to be under pressure on the Daily chart after another false breakout above the near-term dynamic resistance. The pair has posted humble gains today, it could drop further if the USDX will resume its short term rebound.To get more news about WikiFX, you can visit wikifx news official website.
The price has erased yesterdays gains and has invalidated the breakout above a major dynamic resistance as the US Non-Farm Payrolls and the Unemployment Rate have come in better than expected. The NFP was reported at 4800K, beating the 3037K estimate, while the Unemployment Rate has decreased to 11.1% in June, even if the specialists have expected a 12.4% rate.
Unfortunately, the Average Hourly Earnings indicator has decreased by 1.2%, versus -0.8% expectations, the Unemployment Claims indicator was reported at 1427K in the previous week, higher versus the 1350K forecast, the Trade Balance has dropped from -49.8B to -54.6B, while the Factory Orders economic indicator has increased only by 8.0%, less compared to the 8.6% estimate.
EUR/USD has failed once again to close above the upper median line (UML) signaling that the bears are still in the game. The false breakout with great separation has signaled that the sellers could take full control again soon.
Still, only a valid breakdown below the 1.1200 psychological level will open the door for a larger drop. EUR/USD is trapped between the upper median line (UML) and the 1.1200 level, a valid breakout from this triangle will bring a great trading opportunity.
The pair has registered a false breakout also above the PP 1.1251 level, and now it seems undecided in the short term. It is very important to see what will happen on the USDX, the index is traded at 97.21, it has made only a false breakdown below the 97.00 level and below the minor up channels support, so the bias is still bullish.
A USDXs rally and a valid breakout above the 98.00 level will confirm a bullish reversal and the EUR/USD broader drop. Only another drop towards the 96.00 will push EUR/USD way higher in the short term.
The pair has made a bearish engulfing pattern right on the upper median line (UML) of the descending pitchfork signaling a bearish momentum. Another lower low, a drop below the 1.1167 will validate a further decline in the short term.
The S1 (1.1081) and the S2 (1.0929) level could be used as downside targets, the 1.1 and the median line (ML) of the descending pitchfork are seen as obstacles as well. I believe that the downside scenario could be invalidated by a potential valid breakout above the upper median line (UML) and by another higher high, if EUR/USD will jump and close above the 1.1302 level.
EUR/USD continues to move sideways, but it will explode soon, a valid breakout from this minor chart pattern will confirm its upcoming period direction.