The EUR/USD has been in a short-term bull move from the lows at 1.1074 in the beginning of August. This is mainly due to a weakness in the US dollar.
This currency pair has hit its secondary bull targets at around the 1.1358 level or the 161.8% of the first leg of the bull move. This zone is also the 61.8% of the 1.1637 - 1.0909 move to the downside. Massive supply is being found and price has tested it twice already.
Right now bulls are recharging at previous lows and the 50% of the last leg up still inside the bull structure for a retest of this supply area. Should this area break, we could look at 1.1430 and above for bull targets.
It all depends on the US dollar. Below is a chart of the Dollar Index Futures contracts. It's easy to spot the immediate trend: we've been very bearish but price has hit some major levels. Not only is this zone supported by an ascending support, but also by massive demand around the 94.16 - 94.35 level, which are also short targets at the 150% - 161.8%.
So basically we need direction on the US dollar to see where the EUR/USD is headed. Dollar bears would make the currency pair test the 1.1358 level for a third time. If in fact bulls pick up the US dollar and the DXY breaks with the bull - bear zone at 94.99, we could see the EUR/USD breaking with the bull structure and test previous levels of support.
