The EUR/USD has decreased significantly in the early morning and is approaching the yesterday’s low, the price has dropped today as the USDX has edged higher in the previous hours and has jumped above an important resistance level, but we have to wait for a confirmation because this could be only a false breakout, the index is located below yesterday’s high and needs to take out this level if will want to resume the upward momentum, however the perspective is bullish on the short term after Yellen’s speech.
The Euro has increased a little after the Euro-zone has released some economic figures, the German Import Prices have increased by 0.1%, has come much better compared to the -0.1% estimate, the Destatis is to release also the German Prelim CPI today, the indicator is expected to increase by 0.1%, we’ll see how the price will react after the publication. Moreover the Spanish Flash CPI has decreased only by 0.1%, less than the -0.5% estimate, has decreased less compared to the 0.6% drop from the previous reading period. The United States data could bring some action on the EUR/USD, the CB Consumer Confidence could drop from 97.3 to 97.2, we’ll see what impact will have on the US dollar, could boost the greenback if will come in line with expectations or better, personally I’m optimistic that the USD will jump higher.

You can see that the rate has started another retreat after the false breakout above the major lower median line of the ascending pitchfork, most likely will approach the median line (ML) of the descending pitchfork, where he could find strong support again, the perspective is bearish as long as the rate is trading inside the descending pitchfork’s body, the major downside target is at the lower median line of the descending pitchfork, you can see that the rate has found strong support at this level in the past. The current retreat is natural after the rate has failed to stay above the upper median line (UML) of the descending pitchfork, we’ll have also an important downside target at the 1.0908 level and also lower at the 1.0823 level.

You can see on the H4 chart that the rate is decreasing inside of a minor descending pitchfork, could resume the downward movement as long as will stay inside this pitchfork. The rate has found temporary support at the minor median line, could retest the upper median line of the minor descending pitchfork before will drop much deeper, maybe the US data will send the rate much lower on the short term. The rate could find support also around the 1.1123 level, a drop below this static obstacle will attract more sellers, which will drive the rate toward the median line (ML) of the descending pitchfork, personally I’m expecting to see the rate much lower because the USDX looks determined to hit new highs.

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