The EUR/USD has rallied aggressively today and has managed to hit a major dynamic resistance, the dollar has dropped significantly as the USDX has plunged. Price remains undecided on the short term, we still have to wait for a fresh trading signal because right now we don’t have any trading opportunity.
Has edged higher aggressively and has erased the last three day’s losses, remains to see what will happen in the upcoming days because is very important to see what will happen on the USDX. The index has fallen aggressively right after the United States data was released, but continues to stay much above the 99.12 static support (resistance has turned into support). The USDX’s drop was somehow expected because has touched two important resistance levels and now is trying to retest the 99.12 obstacle.

USDX

I've added the USDX's chart to show you better what's happening on this index and what perspective do we have. Has found strong resistance at the lower median line (LML) of the major ascending pitchfork and at the 99.84 static resistance. We could still have a Falling Wedge pattern if the price will stay above the 98.57 static support, you can see that the index has lost the bearish momentum, the behavior will change if will start to make higher lows, a valid breakout from the descending pitchfork's body will validate a larger rebound. The Euro has increased even if the Euro-zone data have come in mixed, the Industrial Production dropped by 0.1%, even if the traders have expected to see a 0.3% growth, while the French Prelim Non-Farm Payrolls increased by 0.3% in Q1, more versus the 0.2% estimate. The German Prelim GDP increased by 0.6%, matching expectations, while the German Final CPI rose by 0.0%, matching expectations. The dollar edged lower versus all its rivals right before the US data were sent to the public, the figures have disappointed so the USD's drop is natural. The Retail Sales rose only by 0.4% in the last month, even if the economist have forecasted a 0.6% growth, while the Core Retail Sales surged by 0.3%, less versus the 0.5% estimate. Unfortunately the inflation data have disappointed as well as the CPI surged only by 0.2% in April, less versus the 0.3% estimate, while the Core CPI increased by 0.1%, less versus the 0.2% estimate. The greenback has received support only from the Prelim UoM Consumer Sentiment, which has increased from 97.0 to 97.7 points, beating the 97.0 estimate, but wasn't enough to save the currency from downside.

EURUSDdaily-1

Price has increased significantly and has retested the second warning line of the major descending pitchfork, we'll have a great selling opportunity if the price will be rejected by this dynamic resistance. We could still have a Rising Wedge pattern on the EUR/USD as long as the rate will stay below the WL2, but most important below the upside line of the potential chart pattern. We could have a selling opportunity also if the rate will drop and will stabilize below the warning line (wl1) of the minor ascending pitchfork.

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