The EUR/USD dropped on Monday morning to the support of a weekly pivot point at 1.1316. The drop occurred due to the USD gaining value, as the US restarted trade talks with China.
The rate is expected to consolidate by trading sideways or surging up to the 1.1340 level.
The European Common Currency traded sideways against the US Dollar, following the US Final GDP data release on Thursday at 12:30 GMT. The EUR/USD exchange currency rate lost 3 pips or 0.03% right after the release. The Euro continued trading at the 1.1372 level against the Greenback.
Bureau of Economic Analysis released the US Final GDP data, which came out in line with expectations of 3.1%.
According to the official release: "The first-quarter percent change in real GDP was the same as previously estimated, reflecting upward revisions to non-residential fixed investment, exports, state and local government spending, and residential fixed investment that were offset by downward revisions to PCE and inventory investment, and an upward revision to imports."
ISM data and employment week
On Monday, the markets will look at the ISM Manufacturing PMI data at 14:00 GMT. This event has caused moves on the EUR/USD since February from 13.1 to 23.6 pips.
On Wednesday, the ISM Non-Manufacturing PMI will be published at 14:00 GMT. The data release has caused moves from 7.5 to 18.6 pips on the EUR/USD charts.
For this pair the week will end with the US Employment data sets – the Average Earnings, Unemployment Rate and Non-Farm Employment Change.
On the EUR/USD charts this event has caused moves in a range from 13.3 to 48 pips since February.
EUR/USD hourly chart's review
On Friday, the EUR/USD currency pair dropped to the weekly S1 at the 1.1343 mark. During today's morning, the pair was testing the lower boundary of the short-term descending channel at 1.1320.From a theoretical perspective, it is expected, that reversal north could occur within the following trading hours. Note, that the exchange rate would have to surpass the given S1, as well the 200-hour SMA at 1.1339.
From a technical point of view, it is unlikely, that a breakout south could occur in the nearest future, as the rate is supported by the monthly PP and the weekly S2, located at 1.1316 and 1.1310 respectively.
Hourly Chart
On the daily candle chart, the rate has made a decline in accordance with a large scale ascending pattern. Namely, it bounced off its upper trend line last week and has begun to move to the lower trend line of the pattern.
Meanwhile, note that the 200-day simple moving average has been passed at 1.1340. The SMA is expected to provide resistance and push the pair down.
Daily chart
Since last Monday, most open EUR/USD position volume was in short positions. Namely, 72% of open volume on the Swiss Foreign Exchange was in short positions.
Traders had stuck to their short positions for a whole week. If one opened his short last week, then the position in theory should be in the green.
However, the traders who went short before that most likely still have not recovered their losses that were experienced due to the sharp Federal Reserve caused surge.
Meanwhile, on Monday, trader set up pending orders in 100-pip range around the pair were bullish, as 60% of all orders were set to buy and 40% were to sell.