02.04.202010:24 Forex Analysis & Reviews: EUR/USD - Potential Falling Wedge!

EUR/USD has decreased a little as the USDX has bounced back after the massive drop. The pair is trading at 1.0945 and is fighting hard to increase again because the Dollar Index has found temporary resistance. The price has been moving sideways according to the H1 chart, it has also developed a Falling Wedge pattern, so an upside breakout will confirm a bullish movement on the short term.

The USD could drop further if the US data disappoints again today, the Unemployment Claims could increase from 3,283K to 3,600K amid the COVID-19 epidemic effect, an unexpected increase could bring high volatility. EUR/USD will increase only if the USDX drops again, a USDX's increase will force the pair to drop further, this scenario will happen if the US data comes in better.

The EUR/USD Falling Wedge pattern is far from being confirmed, the price is trading much below the upside line and below the 38.2% retracement level. So, only a valid breakout above the 38.2% level and most important from the chart pattern will validate a further increase on EUR/USD.

A potential increase will be invalidated if EUR/USD makes a downside breakout from this pattern. The bias is bearish as long as the price stays within the descending pitchfork's body.

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We'll have a long opportunity if the price stabilizes above the upper median line (uml) of the descending pitchfork and if it makes a valid breakout from the Falling Wedge pattern. If the pattern is confirmed and if the price makes a valid breakout, EUR/USD could register an increase of approx 190 pips.

EUR/USD is still under pressure as long as it stays within the descending pitchfork, a valid breakdown below the 1.0900 psychological level and below the downside line of the potential pattern will signal a sharp drop at least till the median line (ml) of the descending pitchfork, which it represents dynamic support.