20.02.202009:37 Forex Analysis & Reviews: USD Remains Favorite Versus EUR

The US dollar seems unstoppable as it has managed to appreciate significantly versus other major currencies. EUR/USD maintains a bearish outlook as the USDX has ignored the near-term upside obstacles and it has reached fresh new highs.

The US dollar index has increased as much as 99.82 and it could climb even higher after the breakout above 99.67 high. The index hasn't been at such elevated levels since May 2017. The USDX's further increase will send the EUR/USD pair towards fresh new lows in the short term.

I've said in yesterday's analysis that EUR/USD was under selling pressure and it could drop anytime as long as it is located below the lower median line (lml). The pair has rebounded from the 150% Fibonacci line and from the S1 (1.0785) level, but it has failed to approach and reach the lower median line (lml) signaling that the price would drop deeper.

I want to remind you that the next downside obstacles are represented by the first warning line (wl1) of the descending pitchfork and by the S2 (1.0741). Stochastic and MACD are still indicating a bullish divergence, but we cannot consider going long unless we'll see a reversal pattern right here on the confluence area formed at the intersection between the 150% line and S2 level.

• Trading Tips

EUR/USD is putting pressure on the confluence area, you should know that a false breakdown (Pin Bar) could announce that the bearish movement is finished and the price could develop a bullish movement with targets at the lower median line (lml), PP (1.0871) and higher at the median line (ml) of the descending pitchfork, near R1 (1.0915).

However, a valid breakdown through the confluence area will send the pair towards S2 (1.0741) level, the warning line (wl1) could attract the price as well.