On Monday, the rate was located just above the 1.0870/1.0880 range. Meanwhile, resistance appeared to be found in the combination of the 1.0900 mark and the weekly simple pivot point. In addition, the 50 and 100-hour simple moving averages were acting as resistance.
Economic Calendar Analysis
On Wednesday, various exchange rates could react to the publication of the Markit Services and Manufacturing Purchasing Managers Indices. They are called indices, but in fact are survey results. Managers of a sector are surveyed about their expectations of the future in the sector.
In general a reading above 50 is seen as positive and a reading below 50 means bad expectations. However, the market does not care for the reading. What matters is the difference from the market consensus forecast. If the released reading is below or above expectations and there is a major difference, it shows that the market was wrong. Such data is followed by an adjustment in the underlying currency's value.
On Thursday, the US Advance GDP might impact the markets via an adjustment of the value of the US Dollar. Better GDP means that the US does not need to cut rates, which would keep the Dollar higher. Bad GDP data indicates that the Fed can cut, which would reduce the value of the USD.
On Friday, at 12:30 GMT, the top event of the week will take place. The US Core PCE Price Index will move the markets. The Core Personal Consumption Expenditure Index is expected to impact the markets by revealing whether inflation has increased or continues to decline. In general, the markets expect a reading of a monthly price increase of 0.2%. If the number is higher, the Dollar should surge. A reading below +0.2% is set to cause a decline of the USD.
EUR/USD hourly chart analysis
If the rate breaks down below 1.0870, it is expected that the rate will look for support in the 1.0840/1.0850 range and the weekly S1 simple pivot point at 1.0850. Further below, support might be found at 1.0823 where the weekly S2 is located at.In the case of a Euro surge against the US Dollar, the pair would have to break the 1.0900 mark. Higher above, the weekly R1 simple pivot point might slow down the pair, before the 1.0940/1.0950 range is tested.
Hourly Chart
EUR/USD daily chart's review
On the daily candle chart, the pair's recovery has managed to break the resistance of the 50, 100 and 200-day simple moving averages.A move higher could encounter resistance at previous resistance levels that are near round exchange rate levels. If all of these levels fail, the 1.1130/1.1200 zone will come into play.
In the case of a decline of the pair, it would have to reach below the SMAs, before looking for support in the 1.0635/1.0700 range.
Daily chart
Read More: Technical Analysis
Traders are short
Last week, Dukascopy traders were bearish on the EUR/USD, as 71% of open position volume was in short positions.
Meanwhile, pending orders in the 100-pip range around the current rate are 52% to sell the Euro against the US Dollar.
This week, traders were 75% short and orders were 61% to sell, as even more traders had become bearish.