- False breakdowns heralded a new leg higher.
- The middle line acts as a magnet and attracts the price.
- A breakout of 1.0664 signaled further growth.
EUR/USD is trading in the green at 1.0678 at the time of writing. The pair looks positive to make new highs near the 1.0700 area. The US dollar is in a correction phase; therefore, the euro can make a significant recovery.
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After the recent decline, the currency pair was somehow expected to correct higher. Yesterday, Final CPI and Final Core CPI in the Eurozone were in line with expectations. Today, the current account of the Eurozone was reported at 29.5 billion, below the expected 45.2 billion and 39.3 billion in the previous reporting period.
US jobless claims are expected to jump from 211k to 215k in the last week, which could be bad for the dollar. Moreover, the Philly Fed manufacturing index is expected to be at 1.5 points, compared to 3.2% in the previous reporting period. Existing home sales could fall from 4.38 million to 4.20 million, while the CB leading index could report a 0.1% decline.
Positive numbers in the US should lift the dollar. Also, speeches by FOMC members could change sentiment in the short term. Tomorrow the German PPI could initiate some action.
Technical analysis of EUR/USD price: A leg up
Technically, the EUR/USD price found support at the lower middle line (lml) of the descending villa, and has now turned to the upside. False breakdowns heralded exhausted sellers and potential upside.
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The pair broke above 1.0664, signaling further growth. The psychological level of 1.0700 is seen as the next potential target and obstacle. In addition, the middle line (ml) and the weekly pivot point also represent resistance levels.
The middle line acts as a magnet and attracts the price. The current rally towards this dynamic resistance is natural after it failed to take down the lower middle line.
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