EUR/USD valid or false breakout? December 07, 2016

The EUR/USD has increased today and now is challenging an important resistance level, has climbed above this level, but remains to see if we’ll have a valid breakout, we have to wait for a confirmation before well open a long position. The price has increased as the USD was punished by the USDX’s drop, the index has slipped lower and is very close to erase the yesterday’s gains. The USDX could challenge the 100.00 psychological level again these days and could approach the 99.84 static support, the perspective remains bullish despite the minor decrease, but a drop below the mentioned support level will attract more sellers, which will drive he index towards the 99.12 support level. The USD will drop versus all its rivals if the USDX will hit new lows.
The currency pair has increased even if the Euro-zone data have failed to impress today, the United States figures have come worse as well, so the rate was pushed higher only by the technical factors. The French Trade Balance has dropped further, from -4.8B to -5.2B, has come much below the -4.2 B estimate, has reached the June 2016 low, but the Euro wasn’t impressed and has rallied versus the greenback and versus the Cable. Moreover the German Industrial Production rose only by 0.3%, less versus the 0.9% increase, while the Italian Quarterly Unemployment Rate has increased by 11.6%, matching expectations, the indicator has remained steady at 11.6% in the third quarter.
The USD had dropped after the yesterday’s minor rebound, the currency wasn’t inspired by the JOLTSJob Openings, which has come in line with expectations, was reported at 5.53M, but lower than the 5.63M level from the previous reading period.

EURUSDd-1

The rate is trying again to break above the median line (ML) of the descending pitchfork, has jumped above this obstacle, but has slipped lower again. We’ll have to be patient to see what will happen in the coming hours, we’ll have to wait for a fresh new trading signal. The price will try to approach the upper median line (UML) of the descending pitchfork if will have enough energy to stabilize above the median line (ML), but I want you to remind you that the perspective remains bearish despite the current rebound, could drop aggressively if the Federal Reserve will hike the interest rate next week. However a rejection here will send the rate tumbling again, but as I’ve just said, we have to wait for a trading opportunity.

EURUSDh

You can see that the price is trading right below the median line (ML) of the descending pitchfork, a failure to above the median line will attract more sellers which will force the rate to drop again towards the 1.0521 static support and towards the lower median line (LML) of the descending pitchfork. We’ll see what will happen tomorrow when the ECB will publish the Minimum Bid Rate, which is expected to remain steady at 0.00% level.

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