EUR/USD has rallied and almost reached the resistance area. We'll see what will really happen soon. The price is likely to move sideways in the short term, so we have to wait for a valid breakout from this range before we take action.

The fresh data from the US may bring volatility to this pair. ISM Manufacturing PMI is expected to drop from 49.1 to 36.7. A smaller decrease will boost the USD. It will appreciate against the other currencies.

EUR/USD increased after the false breakdown below the 1.0777 static support and after the failure to reach and retest the lower median line (LML) of the descending pitchfork. I said yesterday that the pair may approach the 1.1 and median line (ML) again.

You should know that a larger increase and a reversal will be confirmed only after a valid breakout above the median line (ML) and above the 1.1 psychological level. A valid breakout above the near term obstacles will signal a reversal.

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We may have a buying opportunity if EUR/USD makes a valid breakout above the 1.1 and most important above the upper median line (UML), the next targets are seen at the 1.1200 and higher at the upper median line (UML).

The failure to reach and retest the lower median line (LML) has signaled a bullish momentum. However, a false breakout with huge separation, pin bar, or a bearish engulfing on the medium line (ML) could announce a sharp drop towards the lower median line (LML).

You should keep an eye on the economic calendar because the fundamentals will drive the price later today. Also, the failure to reach the 1.0635 low has signaled that the drop could be finished and that we may have another leg higher.