EUR/USD has been increasing aggressively on the short term as the USDX drops after the amazing rally. A US Dollar Index corrective phase will force the currency pair to rebound and to recover after the last drop.
EUR/USD has decreased significantly after the ECB and FED stimulus measures to fight the coronavirus damages. A USDX's valid breakdown below the 101.07 level, another lower, low will open the door for a further drop on the short term. This scenario will weaken the USD which will depreciate versus the major currencies, while Gold will advance. EUR/USD maintains a bearish outlook on the medium to the long term as the COVID-19 epidemic could push the eurozone into crisis.
EUR/USD has found strong support at 1.0653 level, near 113% level, it has managed to come back above the median line (ml) of the descending pitchfork, signaling that the downside movement could be finished.
The price has retested the median line (ml) and now has stabilized above the 100% level, a valid breakout above the Pivot Point (1.0857) and above the upper median line (uml) of the black descending pitchfork will bring us a long opportunity.
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EUR/USD has moved sideways between 1.0653 and 1.0830, a valid breakout from this range and above the upper median line (uml) will confirm a reversal on the short term, the first upside targets are seen at 61.8% level and higher at the weekly R1 (1.1077) level.
A potential upside movement will be invalidated if EUR/USD makes a false breakout with a great separation above the PP (1.0857) and above the upper median line (uml) and if the pair drops below the 1.0653 level. If this scenario takes shape, we could go short from below 1.0653 level with a potential target at the weekly S1 (1.0478) level.
The material has been provided by InstaForex Company - www.instaforex.com