EUR/USD and GBP/USD Technical Analysis!| Daily Forex Analysis•Olimpiu Tuns

The US dollar is trading in the red again as the USDX is very heavy and it could drop deeper in the short term. Technically, the index is under massive selling pressure, so a further drop will push EUR/USD and the GBP/USD higher.

USD was punished again by the United States figures, the PPI has decreased by 0.2%, even if the specialists have expected to increase by 0.4%, while the Core PPI has dropped by 0.3%, versus 0.1% drop in May, the market has expected to see a 0.1% growth in June. Unfortunately, the poor numbers have forced the greenback to lose significant ground versus its rivals.

● USDX Pressuring Static Support

The US Dollar Index has come back down to test and retest the 78.6% retracement level, a valid breakdown from this minor range between the 96.43 and the 97.74 levels could announce a further drop at least till the 96.00 psychological level.

As I‘ve said higher, a USDX’s further drop will push EUR/USD higher, we have a strong negative correlation between these two instruments. The pressure is high as long as the rate stays below the 61.8% (97.14) level and below the upper median line (UML).

Ive said in my previous analyses that only a valid breakout from this descending pitchfork, above the upper median line (UML) will really announce a USD major increase versus the other currencies.

The 96.00 level represents a critical support zone, a valid breakdown below this area will validate a further drop and the USD‘s major depreciation, while a false breakdown with great separation, reversal pattern, will suggest that the decline is finished and that the USDX will start another leg higher which will the dollar’s recovery.

Also, a rebound from the 78.6% (96.43) level could signal a bullish momentum because most likely the index will resume its sideways movement.

● EUR/USD Upside Seems Confirmed

EUR/USD is traded at 1.1325 level and it seems determined to escape also from the minor range pattern. The price has decreased from 1.1370 Thursdays high and it has retested the upper median line (UML) of the descending pitchfork, a valid breakout above the 1.1348 will suggest buying again and it could validate a further upside movement.

The R1 (1.1404) is seen as static resistance, I believe that EUR/USD will ignore this obstacle if it will make a valid breakout above the 1.1348 level. The 1.1495 and the R2 (1.1574) could be used as near-term upside targets.

A further upwards movement will be invalidated only if the USDX will edge higher and if EUR/USD will drop below the 1.1200 again.

● GBP/USD Towards New Highs

GBP/USD has retested the broken upper median line (uml) of the minor descending pitchfork and now is pressuring the 1.2647 static resistance, a valid breakout above this level will signal a potential increase towards the median line (ML) of the major black ascending pitchfork again.

You can see that the pair has found strong support on the 50% Fibonacci line of the major ascending pitchfork, so technically, it is somehow expected to be attracted by the median line (ML) again.

GBP/USD has moved higher between the median line (ML) and the 50% Fibonacci line, so the outlook is still bullish. The price has failed to touch the median line (ml) of the minor descending pitchfork, so the rally towards the upper median line (uml) and towards the 1.2647 was expected.

A minor decrease could appear only if the GBP/USD will make a false breakout above the 1.2647. The 61.8% retracement level and the R1 (1.2725) are seen as strong resistance levels as well, a valid breakout above these levels will confirm a further rally at least till the median line (ML).

[About The Author]

Olimpiu Tuns is a seasoned market analyst / trader / trainer on the financial markets with expertise in forex, cryptocurrencies, commodities, futures, options, index, CFD for more than 8 years. He is also a famous blogger in both technical and fundamental analysis, trading signals, trade setups, etc.

Olimpiu Tuns currently works as a Financial Markets & Crypto Analyst / Signal Provider / Trader / Trainer.

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