The EUR/USD bearish movement was stopped and the price has rebounded and is trying to recover after the last three days decrease. The pair has increased also because the Us dollar index has consolidated and has registered a narrow movement, the price could drop again in the coming days as the USDX is expected to resume the upward movement, the EUR/USD is expected to resume the correction phase. The Euro has increased today as the Euro-Zone Current Account has increased unexpectedly higher, from 19.2B to 27.3B, exceeding the 19.6B forecast, moreover the Geman PPI has surged by 0.1% in April, but less compared to the 0.2% estimate, has increased much more than the 0.0% growth from March. The greenback has slowed down the increase after the poor economic data from yesterday’s trading session, the Unemployment Claims have decreased from 294K to 278K, but has failed to reach the 276K prediction, moreover the Philly Fed Manufacturing Index has decreased unexpectedly to -1.8%, the traders have expected an increase to 3.2 points.
The US dollar has received a helping hand from the Existing Home Sales indicator, which has increased from 5.36M to 5.45M, has come much better than the 5.40M estimate, the greenback has shown signs of life after the indicator was released.
The EUR/USDis trapped below the 1.1217 level, has jumped above this obstacle today but wasn’t able to stay higher, could resume the last days decrease as is expected to reach and retest the lower median line of the ascending pitchfork, is expected also to reach the lower median line of the descending pitchfork, in my opinion the price is attracted by the confluence area formed at the intersection of the lower median line (LML) with the minor lower median line (lml), a drop below this confluence area will attract more sellers which will lead the price down. The price is on a declining path as the price has failed to stay above the major horizontal resistance from 1.1466 level, has failed also to retest the sliding parallel line. The pair continues the medium term extended sideways movement, the price could approach the support of this range movement if the Federal Reserve will hike the interest rate in June or July. The FOMC member Dudley has said that the US economy will be strong enough to support the interest rate increase.
Technically, the price is expected to drop further on the short term, you can see that the price has come back to retest the broken support from 1.1217 level, most likely will decline further if the price will close tonight below the mentioned level. The EUR/USD has decreased slowly in the last weeks, the price has tested and retested any obstacle, remains to see how the price will react on Monday after the Euro-zone economic data will be released, the Euro-zone Flash Services and Manufacturing figures will be released along with the French and German numbers. The Manufacturing and Services sectors are expected the continue the expansion and could save the Euro from downside, the pair could rebound and could move sideways in the coming days if the data will come better.