The EUR/USD has managed to rebound and has increased significantly in the last four days, the price has edged higher as the US dollar index has plunged again and has taken down an important support level, the greenback is decreasing sharply because the Federal Reserve has disappointed again by maintaining the interest rate on hold, the FED has left the door open for an increase in June, but the traders don’t believe Yellen anymore. Personally I don’t think that the FED will hike the rate at least till September, or they could hold the rate steady till the end of the year if the US economic conditions will not force the Federal Reserve to raise the rate.
The pair is approaching the major horizontal resistance from 1.1451 level as the price has failed to decrease below the 1.1200 psychological level, the EUR/USD continues to move higher inside of the ascending pitchfork, is trapped between the lower median line (LML) and the sliding parallel line (ascending dotted line), you can notice that the sellers have failed to push the price toward the lower median line (LML), so the bulls have taken the lead again and could challenge the medium term range resistance. The pair continues to move inside the extended sideways movement, could start a broader corrective phase only if will jump and consolidate above the 1.1451 level, the outlooks is bullish on the short term as long as the USDX continues to drop.
I’ve added the USDX daily chart to show you better why the USD is decreasing versus all its counterparts, the index has decreased sharply in yesterday’s trading session and has resumed the bearish momentum today, has fallen below the previous low from 93.62 and now is targeting the 93.12 horizontal support. The USDX is decreasing again because has failed to escape from the descending pitchfork’s body, we had only a false breakout last Friday, the rate could retest also the 50% Fibonacci line, the perspective remains bearish as long as the price is trading below the upper median line (UML), the USD will decrease further if the USDX will reach new lows.
The Euro has increased today also because the Spanish Flash GDP has increased by 0.8% in Q1, exceeding the 0.7% forecast. Moreover the French Prelim GDP rose by 0.5% in the first quarter, higher than the 0.4% estimate, while the French Consumer Spending has surged by 0.2% in March despite that the estimate was -0.1%. You should keep an eye on the economic calendar today because we have many more economic events that could have a high impact on the EUR/USD pair, the Euro-zone CPI and Core CPI will be released later along with the Unemployment Rate, while the US is to release the Personal Spending and Personal Income data. Any disappointment from the US will send the USD into agony.
The EUR/USD is moving higher inside of a short ascending pitchfork, the price has jumped above the median line after several retests, could become strongly bullish if will stabilize above the median line and above the horizontal resistance from 1.1376 level.