On Friday morning, the EUR/USD passed below technical support levels near 1.0800. The pair was expected to continue to decline, as it had no other technical support.
Meanwhile, it appears that despite massive bad US data is being released, the US Dollar is not losing value.
US Unemployment Claims
The Euro depreciated against the US Dollar, following the US Unemployment Claims data release on Thursday at 12:30 GMT. The EUR/USD exchange currency rate lost 18 pips or 0.16% after the release. The Euro continued trading at the 1.0850 level against the Greenback after the release.
The Department of Labor released the US Unemployment Claims data, which came out worse-than-expected of 6.648 million compared with the forecast of 3.600 million.
According to the official release: "The COVID-19 virus continues to impact the number of initial claims. Nearly every state providing comments cited the COVID-19 virus. States continued to identify increases related to the services industries broadly, again led by accommodation and food services. However, state comments indicated a wider impact across industries. Many states continued to cite the health care and social assistance, and manufacturing industries, while an increasing number of states identified the retail and wholesale trade and construction industries."
Economic Calendar Analysis
As it occurred during the last week, due to the fundamental changes in the markets, Dukascopy Analytics suggest to note the scheduled macroeconomic events, but avoid using historical data for guidance.
Namely, the whole world changes the money supply by announcing monetary stimulus and government expense increases. In other words, the central banks are creating more money and giving it to governments to stop the effects of the coronavirus. In effect, each announcement causes a fall of the currency that it affects.
However, click on the link and take a look at the last reactions to various events in March. Even already ignored events like Producers Price Index and Consumer Price Index caused notable reactions above 20 pips. Previously, the release of these data sets did not cause an increase of exchange rate volatility.
EUR/USD hourly chart's review
On Friday morning, the rate passed the support of a pivot point and the 1.0800 level. The rate had no technical support as low as 1.0615. In addition, the rate broke the channel down pattern.In the near term future, the currency exchange rate was expected to decline. Although, it was not expected to be a sharp drop. The pair is considered oversold on the hourly chart, as the hourly simple moving averages have been left above the 1.0900 level.
In addition, round price levels like the 1.0750, 1.0700 and 1.0650 are expected to provide psychological support.
Hourly Chart
On the daily candle chart, EUR/USD has begun a decline, which was expected. It was expected because at the start of March the rate plummeted too sharply. Recently, it retraced back up to the daily simple moving averages and removed the oversold pressure. Afterwards, the decline resumed.
Daily chart
By the middle of Friday's GMT trading hours, 70% of open EUR/USD position volume on the Swiss Foreign Exchange was in short positions.
The sentiment had remained almost unchanged since March 20. Traders remained short despite the recovery of the EUR/USD that has been occurring since that day.
During the previous trading sessions, they were recovering some of their losses.