The EUR/USD pair is trading at 1.0515 at the time of writing. The price rebounded as the Dollar Index dropped after reaching 103.92 high. DXY's correction in the short term could push the EUR/USD higher.
After its massive drop, EUR/USD could try to rebound and recover again. Still, the pressure is high, it could drop deeper anytime. Fundamentally, the USD took a hit from the US Advance GDP which reported a 1.4% drop in Q1 versus 1.1% growth expected and compared to 6.9% growth in the previous reporting period. In addition, the Advance GDP Price Index came in better than expected, while the Unemployment Claims reported worse than expected data.
EUR/USD Temporary Growth!Technically, the bias remains bearish as long as it stays under the downtrend line. As you can see on the H4 chart, the pair found support on the descending pitchfork's lower median line (lml) and now is fighting hard to grow.
Its false breakdown below the former low of 1.0480 signalled an oversold. Still, it's premature to talk about a strong rebound. Temporary growth could only bring new selling opportunities. Personally, I would like the rate to come back to test and retest the downtrend line before resuming its sell-off.
In the short term, the rate could come back to test and retest the immediate downside obstacles, the former lows. False breakdowns below 1.0480 and below the lower median line (lml) could signal a potential rebound at least towards the downtrend line.
EUR/USD Outlook!The bias is bearish, that's why I'll look for new short opportunities. Coming back to test and retest the S3 (1.0551) and the black downtrend line, registering only false breakouts may signal a new sell-off.
A new lower low, dropping and closing below 1.0471 could activate more declines. A further drop could be invalidated only if EUR/USD makes a valid breakdown above the downtrend line.