- The EUR/USD pair could extend a rally after passive above parity.
- The upper median line (UML) could attract the price.
- The BOC could have an impact on the USD as well.
The EUR/USD price rallied in the short term. The pair is trading at 1.0029 at the time of writing. The price jumped above parity again as the US dollar dropped.
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Fundamentally, the USD was expected to depreciate versus the other major currencies after the US Flash Manufacturing PMI dropped from 52.0 points to 49.9, signaling contraction. At the same time, Flash Services PMI dropped from 49.3 points to 46.6 points, even though the traders expected a potential growth to 49.6 points on Monday.
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In addition, the CB Consumer Confidence came in worse than expected yesterday. The indicator was reported at 102.5 points below the 105.9 points expected.
Today, Eurozone Private Loans reported a 4.4% growth compared to the 4.8% expected, while M3 Money Supply registered a 6.3% growth compared to the 6.0% expected. Later, the US Goods Trade Balance could be reported at -87.4B, Prelim Wholesale Inventories could register a 1.0% growth, while New Home Sales could come in at 579K below 685K in the previous reporting period.
Also, don’t forget that the BOC is expected to increase the Overnight Rate from 3.25% to 4.00%. This is seen as a high-impact event and could also shake the USD.
EUR/USD price technical analysis: Strongly bullish
As you can see on the hourly chart, the price stayed near the down trendline signaling an imminent breakout. This scenario took shape, and it accelerated its growth after stabilizing above 0.9952 broken resistance. The parity (1.0000) represented a key upside obstacle. The current aggressive breakout indicates strong buyers and an upside continuation ahead.
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After its strong rally, the price could come back to test and retest the 1.0000 psychological level before extending its growth towards the next potential upside target represented by the R3 (1.0090). Technically, the pair also jumped above the median line (ML) of the ascending pitchfork. As long as it stays above this level, the currency pair could approach and reach the upper median line (UML).
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