The EUR/USD looks undecided right now after the today’s volatility, is challenging an important dynamic support, a valid breakdown will open the door for more declines in the upcoming period. Has decreased today as the dollar index resumed the minor rebound and reached the 96.53 level, where has found temporary resistance. I want to remind you that the rate remains under selling pressure despite the current rebound, this momentum could be only temporary because is still trapped below an important dynamic resistance, which could stop the current bounce back.
Personally, I believe that the USDX needs to make an accumulation movement before will decide to start a larger increase, right now I don’t believe that is capable of a broader momentum. Technically the USDX remains under pressure and could decrease to reach a major support level, could move sideways and could try to accumulate more directional energy.
However, looks like that the dollar index is developing a Falling Wedge pattern on the Daily chart, but we have to wait for a confirmation that the rate will increase in the upcoming weeks, all you need to know is that a further increase will force the greenback to dominate the currency market again.
The Euro-zone data have come in mixed in the European trading session, the Retail Sales surged by 0.4% in the last month, matching expectations, meanwhile the Services PMI increased from 54.7 to 55.4 points, exceeding the 54.7 estimate, signalling that the expansion continues. Moreover the German Final Services PMI surged from 53.7 to 54.0 points in June, exceeding the 53.7 estimate, signalling that the expansion continues in the services sector, French Final Services PMI surged unexpectedly in June, was reported at 56.9 points, higher versus the 55.3 estimate and versus the 55.3 in the former reporting period.
The Spanish Services PMI increased as well, to 58.3 points, from 57.3 points, even if the specialists have expected to see a drop to 56.6 points, the Italian Services PMI disappointed because has dropped from 55.1 to 53.6 points, much below the 54.6 forecast.
USD decreased a little after the FOMC Meeting Minutes and because the United States Factory Orders dropped by 0.8% in May, more versus the 0.5% estimate and versus the 0.3% drop in the former reading period. The IBD/TIPP Economic Optimism decreased from 51.3 to 50.2 points, even if the traders have expected to see an increase to 51.6 points.

EURUSDdaily-1

Price decreased below the lower median line (lml) of the ascending pitchfork, but has squeezed and now seems undecided. A valid breakdown below the lower median line (lml) will open the door for more declines, the next downside targets will be at the WL4 of the former descending pitchfork and lower at the first warning line (wl1) of the minor ascending pitchfork. Maintains a bullish perspective as long as is trading above the warning line (wl1), so the retreat could be only temporary, a major drop will appear if the rate will ignore the support from the warning line (wl1).

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