Price dropped and resumed the yesterday’s bearish candle. The dollar has taken the lead on the short term again as the dollar index has managed to close much above the 93.81 horizontal resistance. USDX has jumped above the 94.00 psychological level and tries to reach new highs. A further USDX’s increase forces the USD to dominate the currency market on the short term.
Personally, I’m still waiting for a retest of the 93.81 broken resistance before will climb much higher. I’ve said in the last weeks that only a valid breakout above the 93.81 obstacle will announce a larger rebound and a potential reversal. Is premature to talk about a reversal on the dollar index because is still trapped below some important resistance levels.
You should know that the rate will be driven by the fundamental factors in the afternoon, the US is to release the Unemployment Rate, Average Hourly Earnings, and the NFP.
Price drops after the retest of the median line (ml) of the descending pitchfork. EUR/USD has finally managed to close below the 1.1711 horizontal support and now moves towards the median line (ML) of the major ascending pitchfork. Technically, it is expected to drop further and to ignore the ML, but we’ll see what impact will have the US data in the afternoon because a disappointment will send the pair higher again on the short term.
Technically, we may still have a Head and Shoulders pattern on the Daily chart, which could confirm a larger drop.
