Moreover, the Euro PMI results have shown that the region was growing in a very strong upward direction since the first half of 2011.

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In addition to the PMI, the Long Term Inflation Swap Forwards, which is one of the most important readings that is carefully monitored by the ECB and its president, has closed last week at 1.656% higher than previous interpretations on weekly basis as well as monthly basis. This indicator can have a good indication for the direction of inflation pressures and price adjustments in the Euro Zone area and thus indicating a clear map for the future of Interest Rate Cycle and the pace of the Quantitative Easing Program as well as the direction of the asset purchases. 

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From Market Sentiment Perspective, the Retail Positioning continues to give short-term bullish continuation after the light effect of the Political Upheaval of Germany and its effect on the price of the EURUSD.  

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On Thursday, the Consumer Price Index (CPI) is expected to increase to 1.6% from a previous 1.4% on yearly basis. Any upward surprise on those numbers may increase expectations for an increase in the level of Interest Rates in the Euro zone within the coming months.

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From a Technical point of view, the previous close above $1.1880 has had a strong positive momentum on the Short-Term Trend of the EURUSD and cancelling the Previous Head and Shoulder Technical Formation with a new Inverted Head and Shoulder on the Relative Strength Index (RSI) Technical Indicator and thus targeting $1.2240; if that comes with a clear cross to the previous high at $1.2092.

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We may see a Short Term Correction to the Downside towards the $1.1860 before a bullish continuation.