The squeeze of the EUR/USD resulted in a decline, which continued on Friday. In general, the rate was expected to continue to decline.
In the case of a decline, the rate should reach for a technical support level near 1.1100.Economic Calendar Analysis
On Friday, January 3, the ISM Manufacturing PMI survey results will be released at 15:00 GMT and the FOMC Meeting Minutes will be published at 19:00 GMT.Next week's scheduled event historical data tables have been published. Click on the link below to read the article.
Read More: 06.01-10.01 Event Historical Reactions
EUR/USD hourly chart's review
The Thursday squeeze of the EUR/USD resulted in high volatility and a break out to the downside. By the middle of Friday's trading, the currency exchange rate had dropped below the support levels that are located from 1.1153 to 1.1141.The rate was set to continue the drop, as it had no technical support as low as the weekly S1 simple pivot point at 1.1102.
On the other hand, take into account that the recent drop occurred in a sharp angle. It is a signal that the rate is oversold and needs to consolidate. It could consolidate by trading sideways or retracing back up to the 200-hour SMA at 1.1141.
Hourly Chart
On Thursday, we wrote how the daily chart indicates that the rate is overbought due to daily simple moving averages being left below. On Friday, the rate's decline partially got rid of the overbought pressure.
Namely, the rate dropped below the 200-day SMA and could reach the 55-day SMA near 1.1100.
Daily chart
Read More: Technical Analysis
Short sentiment increases
On Thursday, 71% of open EUR/USD position volume was in short positions.
By the middle of Friday's London trading hours, the sentiment had become 74% short.
The same has occurred with trader set up orders, as 72% of orders in the 100-pip range were to sell and 28% were to buy on Thursday.
On Friday, 77% of orders were to sell.