EUR/USD extends its growth as expected

EUR/USD rallies as the US Dollar Index drops like a rock. We have a strong negative correlation between these two assets. As you already know from my analysis, EUR/USD maintains a bullish outlook in the short term. It is located at the 1.1848 level and is now fighting hard to stabilize above broken dynamic resistance.

The US dollar has taken a hit from the ADP Non-Farm Employment Change which has increased from 326K to only 374K coming far below the 640K estimate. Also, the Final Manufacturing PMI dropped from 61.2 to 61.1 points while the ISM Manufacturing Prices indicator was reported at 79.4 points below the expected 84.1 .

The ISM Manufacturing PMI has come in better than expected at 59.9 compared to 58.5 forecasts, but it has failed to save the greenback from the downside.

EUR/USD Upside Breakout

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EUR/USD rallied and now it stands above the 1.1845 former high and beyond the upper median line (UML) of a major descending pitchfork. It has failed to stabilize under the ascending pitchfork's median line (ml) signaling strong bulls.

Technically, confirmation of its current breakout through UML may signal further upward movement. Personally, I would like the price to drop a little to test and retest the broken upper median line and the weekly R1 (1.1835) before jumping higher.

Forecast

The pair is strongly bullish, so it could approach and reach the R2 (1.1874) soon. The ascending pitchfork's upper median line (uml) is seen as an important target as well. A minor consolidation here or a broken levels' retest could bring fresh buying opportunities.

The material has been provided by InstaForex Company - www.instaforex.com

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