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The EUR/USD pair was trading in the red at 1.0062 on the H1 chart at the time of writing. The currency pair rebounded as the Dollar Index retreated in the short term. DXY's temporary drop was expected after its strong rally.
Today, the currency pair dropped as much as the 0.9999 level where it has found support. Now, it has rebounded even if the German ZEW Economic Sentiment came in at -53.8 points below -40.6 points expected, while the Euro-zone ZEW Economic Sentiment was reported lower at -51.1 points versus -39.0 forecasted.
On the other hand, the IBD/TIPP Economic Optimism and the NFIB Small Business Index came in worse than expected. Tomorrow, the US inflation data could be decisive. The CPI and the Core CPI could bring high volatility and sharp movements.
As you can see on the h1 chart, the rate found support right on the 1.0000 psychological level and now it has challenged the 1.0071 static resistance. The descending pitchfork's lower median line (lml) represents a dynamic resistance.
As long as it stays under these levels, the bias remains bearish. False breakouts could announce a new sell-off. After its massive drop, a temporary rebound was natural.
The EUR/USD pair could come back down if it makes only false breakouts through the 1.0071 and above the lower median line (lml).
A valid breakout above the 1.0071 and above the lower median line may signal further growth towards the 1.0161 area. This scenario could bring some long opportunities in the short term.
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