On the EUR/USD charts it resulted in a drop to the combined support of the 1.0800 mark and the 100 and 200-hour simple moving averages. These levels held and caused a recovery back to the resistance of the 50-hour SMA and the 1.0840 level.
Economic Calendar Analysis
This week, US inflation data sets are in focus. In addition, the European central bank is set to make a rate announcement.
The United States Consumer Price Index will be released to the public on Wednesday at 12:30 GMT. The markets expect US inflation to show an average price increase of 0.3% in core and base levels. This would mean annual inflation of 3.4%, which is an increase, compared to March's 3.2%.
Higher inflation indicates that the Federal Reserve cannot cut interest rates and tightening of USD supply is needed. Namely, high inflation equals higher US Dollar value. Lower inflation is set to create the opposite – a decline of the USD.
On Thursday, at 12:15 GMT the European Central Bank is set to announce its monetary policy and the Main Refinancing Rate. Afterwards, a press conference will be hosted at 12:45 GMT.
In general, the ECB has been following the example of the Federal Reserve. The members of the monetary policy have been repeating that they could cut rates in June, but will watch the Federal Reserve. These comments have been coming with a two to three month delay, compared to the Federal Reserve's statements on possible cuts. It could be the case that the ECB changes its tone during this week, as US bankers have stated that cuts could not occur during this year.
Also on Thursday, at 12:30 GMT, additional US inflation data will be released. The less noteworthy Producer Price Index will be published.
The PPI shows price changes at the producer level. Base theory is that all price increases at the production level are sooner or later passed down to the consumer, as the producers want to stick to their profit margins. Namely, the PPI is a pre-signal to what will happen with the CPI.
EUR/USD hourly chart analysis
If the rate passes above 1.0840, resistance could be encountered in the 1.0860 and 1.0880 levels. Above these levels, the 1.0900 mark and the weekly R1 simple pivot point are expected to slow down or stop the surge.On the other hand, a decline of the Euro against the US Dollar is set to look for support in the weekly simple pivot point at 1.0812, the 100-hour simple moving average near 1.0815. Below these levels, the 1.0790/1.0800 range and the 200-hour SMA are set to impact the rate.
Hourly Chart
EUR/USD daily chart's review
On the daily candle chart, the recovery has passed above the 50 and 200-day simple moving averages. However, on Thursday, the 100-day simple moving average was holding.Higher above, watch the 1.0950 level that acted as resistance in March.
Daily chart
Read More: Technical Analysis
Traders are neutral
On Monday, traders were 51% short as that amount of open position volume was in bearish positions.
Meanwhile, pending orders in the 100-pip range around the pair were 64% to buy.
Prior to the data release, on Thursday, open positions were 53% short and orders were 68% to sell.