The EUR/USD currency exchange rate began the week by trading above the support of the 1.1200 level.
At that level a 38.20% Fibonacci retracement level was located at. Moreover, the 1.1200 level has been working as a psychological level throughout the recent past.
The European Common Currency depreciated against the US Dollar, following the US Retail Sales data release on Friday at 12:30 GMT. The EUR/USD exchange currency rate lost 19 pips or 0.17% right after the release. The Euro continued trading at the 1.1235 level against the Greenback.
Census Bureau released the US Retail Sales data, which came out worse-than-expected of 0.5% compared with forecast 0.7%.
According to the official release: "Retail trade sales were up 0.5 percent (±0.5 percent)* from April 2019, and 3.1 percent (±0.7 percent) above last year. Nonstore retailers were up 11.4 percent (±1.4 percent) from May 2018, while sporting goods, hobby, musical instrument, and book stores were down 4.2 percent (±2.5 percent) from last year."
Draghi's speeches might affect the EUR/USD
This week a central bank forum is taking place in Sintra. Speeches will happen each day until Thursday.
Namely, Draghi speaks at 17:00 GMT on Monday, 08:00 GMT on Tuesday, 14:00 GMT on Wednesday. The first speech will just have the opening remarks. Second one is his speech on policy, and the third one will be the closing remarks.
Bank of England Governor Mark Carney will speak at 14:00 GMT on Tuesday.
In the meantime, this week various central banks will make monetary announcements.
Reserve Bank of Australia will publish its Monetary Policy Meeting Minutes at 1:30 GMT. Note that there will be just the meeting minutes. No rate announcement is taking place.
On Wednesday, at 18:00 GMT the Federal Reserve is making its FOMC Statement, Federal Funds Rate and Economic Projections. Afterwards, at 18:30 GMT the FOMC Press Conference will take place.
On Thursday, Bank of England will make a Rate Statement, Monetary Policy Summary and MPC Official Bank Rate Votes.
Moreover, also on Thursday, the Bank of Japan will make a Monetary Policy Statement and host a Press Conference. However, the time has not been set. Bank of Japan does not set an exact time for their monetary policy events.
In addition, this week there will be notable macroeconomic data releases occurring.
On Wednesday, the UK CPI will be published at 08:30 GMT, and at 12:30 GMT the Canadian CPI will be out. The UK event can cause a move of up to 20 pips, and the Canadian CPI on average has caused moves near 40 base points.
On Thursday, UK Retail Sales will be out at 08:30 GMT. Although, the rate is not expected to cause a big move because the event will happen just before the Bank of England event.
On Friday morning, the European PMIs will get released. Most important of the PMIs will be the German data at 07:30 GMT.
The week will end with the Canadian Retail Sales and Core Retail Sales at 12:30 GMT.
EUR/USD hourly chart's review
During Friday, the EUR/USD currency pair dropped to the support level—the Fibonacci 38.20% retracement at 1.1200. During today's morning, the pair was testing the support level.If the given support holds, it is expected, that a reversal north could occur in the nearest future. It is unlikely, that the Euro could exceed the 1.1255 mark due to the resistance level formed by the weekly PP, the monthly R1 and the 55-hour SMA.
On the other hand, the exchange rate could continue to trade sideways, trying to breach the given support. If the support level does not hold, it is unlikely, that the rate could drop lower than 1.1181 due to the support of the monthly PP.
Hourly Chart
On the daily candle chart one can observe that at the 1.1200 level a 61.80% Fibonacci retracement level is located at.
Meanwhile, the 55 and 100-day simple moving averages were actively providing resistance and support during the past weeks. On Monday, they were located at 1.1222 and 1.1272.
Daily chart
On Monday, traders were still short on the EUR/USD. Namely, on the Swiss Foreign Exchange of all the open position volume 72% was in short positions.
Meanwhile, trader set up pending orders in 100-pip range around the pair were short, as 59% of orders were to sell.