The currency pair has bounced off support and now it seems determined to reach the near-term resistance levels before it drops again. I said in yesterday's article "EUR/USD Setting Up For Reversal" that the pair could increase in the short term.

The USD was weakened today by the USDX's drop, the index is trading in the red and has closed the yesterday's gap up, signaling that it could drop deeper on the short term. A USDX's further decrease will force EUR/USD to increase and to reach new highs. It seems that the poor US data, NFP and Unemployment Rate, have weighed heavily on the dollar. The US economic situation is getting worse as the COVID-19 pandemic is far from being complete, the Unemployment Rate has increased to 4.4%, while the NFP has dropped to an unexpected level, at -701K.

EUR/USD was rejected again by the 1,0777 level and now is almost to reach the weekly Pivot Point (1.0906) level. Maybe a temporary rebound was expected after the last sell-off. You should know that the bias and the outlook will remain bearish as long as the price stays below the 1.1 psychological level and most important below the median line (ML) of the orange descending pitchfork.

A false breakout above the Pivot Point will signal the EUR/USD will drop further with a target at the lower median line (LML) and at the weekly S1 (1.0668) level. However, a valid breakout above the PP (1.0906) will confirm a further increase towards 1.1, the median line (ML) and towards the R1 (1.1040).

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EUR/USD is still under pressure as long as it is traded below the 1.1000 level and below the median line (ML). A drop below the 1.0777 level will confirm a further drop at least till the lower median line (LML) and towards the S1 (1.0668), only a valid breakdown below these major support levels will validate a major drop towards the 1.0458 static support.

In the short term, a valid breakout above the PP (1.0906) level will signal a further increase, the major upside targets are seen at R1 (1.1040), median line (ML) and at the 1.1 level. A broader increase in the medium to the long term will be confirmed only after a valid breakout above the mentioned resistance levels.

EUR/USD increases only because the USD is punished by the USDX's sell-off, a USDX increase will send the pair down again.