EUR/USD is in a short-term correction after the failure to break the 1.2 psychological level. It is trading at the 1.1815 level with a bullish bias. USDX's rebound pushed EUR/USD lower to test the buyers.
The pair has rebounded as eurozone unveiled its Final Services PMI data. The reading increased from 50.1 to 50.5 points signaling expansion. Furthermore, the German Final Services PMI jumped unexpectedly higher to 52.5, beating 50.8 consensuses.
You should keep an eye on the economic calendar as the US data could change the sentiment again.
EUR/USD found support right on the S1 (1.1802) level. It returned above the upper median line (uml). Despite the last drop, EUR/USD maintains the bullish bias as long as it stays above the upper median line (uml) of the descending pitchfork and above the 1.17 level.
The false breakout through the confluence area formed at the intersection of 1.2, wl1, and the upside line of the ascending channel has forced the pair to drop in the short term. You should be careful because EUR/USD failed to reach the downside line of the up-channel in the most recent attempt.
I still believe that the pair will come back down to challenge the uptrend line in the upcoming hours.
EUR/USD Trading TipsSell a drop below 1.17 level with a first potential target at 1.1495 level, or lower at the lower median line (lml).
Buy EUR/USD if the price will make a valid breakout above the first warning line (wl1), and of the 1.2 psychological level.