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Market sentiment on EUR/USD seems undecided on the short term. The pair is still trading sideways, but the overall bias remains bearish as the price is trapped below some major resistance levels. The pair could drop further if the USDX resumes the upside movement.
The dollar index has stabilized above the 98.91 static resistance and now it could jump towards 99.37 upside obstacle. EUR/USD is more on a sell ode than on a buy mode as long as the price fails to show us a potential reversal pattern.
EUR/USD is trading below the PP (1.0871) and below the lower median line (lml) of the descending pitchfork, that's why the outlook is still bearish on the H4 chart. The next downside target is at the 150% Fibonacci line (descending dotted line), S1 (1.0785) level represents support as well.
We could have a great selling opportunity if the price registers only a false breakout above the lower median line (lml). So, a rejection from the lower median line (lml) or from the PP and a new lower low will drive the price towards the mentioned near-term support levels.
EUR/USD remains under bearish pressure as long as it is located below the lower median line (lml), the current range could represent a distribution before the price resumes the downside movement. I want to see a retest of the near-term resistance levels before another drop, Stop Loss could be placed above the previous high.
A further drop could be invalidated only by a Pin Bar or by a Bullish Engulfing at this moment, Stochastic indicator has shown a bullish divergence on the H1 chart, but it is not enough to consider a long position. EUR/USD could climb higher on the short term if the USDX comes back to retest the 98.91 static support.
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