Is The US Dollar Ready To Reverse?|KOL Analysis•Olimpiu Tuns

The USD was into a corrective phase in the last month, but now it shows some positive signs, it could try to come back higher as the USDX has printed a reversal pattern. EUR/USD is trading in the red today and it could resume Fridays drop if the US Dollar Index will jump higher.

Some good US data today could help the greenback to recover versus its rivals, the ISM Manufacturing PMI is expected to increase from 52.6 to 53.6 points, the Final Manufacturing PMI could remain steady at 51.3 points, while the ISM Manufacturing Prices indicator could jump from 51.3 to 52.2 points.

The Construction Spending economic indicator is expected to increase as well, by 1.0%, versus a 2.1% drop in the previous reading period, the Wards Total Vehicle Sales may increase from 13.1M to 14.0M.

● USDX Printed A Bullish Engulfing Pattern!

The USDX has dropped as much as 92.55 on Friday, but it has closed higher at 93.35, developing a bullish engulfing reversal pattern. The index is trading in the green today, it has opened with a gap up, so a bullish candle could confirm the reversal formation.

The US Dollar Index is traded again above the inside sliding line (SL1), the false breakdown below this dynamic support has signaled that the index could give birth to bullish momentum, leg higher.

So, if the USDX will rebound, recover, EUR/USD will start a corrective phase, will decline in the upcoming period. Ive said in another article, analysis, that the USDX could approach and reach the second sliding line (SL2) if it stabilizes below the SL1, the failure to reach this dynamic target and the median line (ML) of the descending pitchfork could send the rate higher towards the upper median line (UML).

An increase towards the UML and towards the 96.00 psychological level will announce the USDs appreciation against the other major currencies.

● EUR/USD Turned To The Downside!

EUR/USD has registered only a false breakout above the 1.1800 level and above the 250% Fibonacci line signaling a correction in the short term. Actually, the false breakout above the confluence area formed at the intersection of the mentioned resistance lines could force EUR/USD to develop a strong downside movement.

The first downside target is seen at the 1.17 level, while the second one is represented by the first warning line (WL1) of the former descending pitchfork. As you already know from my articles, analysis, EUR/USD will maintain a bullish outlook as long as it stays above the warning line (WL1) and above the 1.1494 level, a temporary drop could bring another long opportunity.

Personally, I believe that EUR/USD could come back higher to test and retest the 250% line or even the 1.18 level before will develop a broader leg down, corrective phase. The reversal pattern, bearish engulfing, could be invalidated anytime if EUR/USD will make a valid breakout above the 250% Fibonacci line.

{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.

He has worked as a Market Analyst / Consultant for three major Brokerage companies, Admiral Markets, MultiBank Exchange Group and InstaForex (live webinars, market analysis, educational materials, video analysis, video tutorials, ghostwriting, content creator), as a Social Media Manager and as a Financial Markets & Crypto Analyst / Contributor for very important news portals/blogs (investing.com, benzinga.com, forexalchemy.com actionforex.com, countingpips.com), websites, educational platforms (Forex.Academy, Forex.Today), independent clients, etc.

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

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