- The bias remains bullish as long as it is above the median line.
- A new higher high activates further growth.
- US data should revive the EUR/USD pair.
The EUR/USD price showed continued growth after the release of US inflation data, reaching the level of 1.0887. It has currently experienced a slight pullback and currently stands at 1.0848.
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It is worth noting that a temporary pullback is common after a recent upswing. The recovery of the dollar index contributed to the dollar gaining against its peers. Despite this, the currency pair maintains a positive outlook in the short term, given the potential for the dollar index to reverse course at any time.
Yesterday brought a mix of economic data from both the Eurozone and the US. In particular, data on US retail sales and the Empire State Manufacturing Index provided support to the dollar.
Today’s US data is expected to play a key role in shaping market dynamics. Projections show that jobless claims could rise to 221,000 from the previous 217,000. The Fed Branch manufacturing index is expected to be -10.4 points, and industrial production could experience a 0.4% decline after growing 0.3% in the previous reporting period. In addition, the capacity utilization rate is expected to be 79.4% in October, down slightly from 79.7% in September.
It is important to note that positive US economic data is likely to strengthen the dollar, while weaker-than-expected figures could put downward pressure on the dollar. The market is still reacting to these indicators, and cautious observation is warranted.
Technical analysis of EUR/USD prices:
From a technical perspective, the EUR/USD pair experienced a pullback after failing to reach the upper middle line (uml) of the rising villa. The failure to retest the higher high of 1.0887 and the false break above 1.0865 signaled a weakening momentum among buyers. Currently, the pair is approaching the middle line (ml) as dynamic support. The overall bullish bias continues as long as the price remains above this level, and the upside potential is activated with a new higher high.
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However, it is necessary to monitor the situation carefully. If the pair falls and stabilizes below the midline, a more significant correction could be triggered. In such a scenario, downside targets may include the R2 level at 1.0800 and the lower middle line (lml). This potential correction could materialize, especially if the dollar index (DXI) rises after the US data release. As always, keeping an eye on market developments will be key in navigating potential changes in the dynamics of a currency pair.
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