In the meantime, it was spotted that traders have taken profits. Namely, 57% of volume at Dukascopy was short on Friday. By mid-Monday, only 51% was still shorts. It is assumed that traders have taken profits prior to this week's US macroeconomic events.
Economic Calendar Analysis
On Tuesday, the combination of the US CB Consumer Confidence index and the JOLTS Job Openings might create a move of the USD that would impact the financial markets.
On Wednesday, market participants are set to ignore the ADP Non-farm Employment release and other releases due to the top event of them all being scheduled for 18:00 GMT.
The US Federal Reserve is set to announced the Federal Funds Rate and release the Federal Open Market Committee Statement. In general, the Fed is announcing its policy and the reasons for it.
The markets expect the Fed to keep its base interest rate unchanged at 5.50%. In theory, the USD should not move during this event. However, all eyes will be on the statement, as the markets will be looking for clues about potential policy changes in September.
Currently the markets expect the Fed to cut rates in September. The statement might reveal that there will be no rate cut or that the Fed is 100% set to do it.
Moreover, additional information is set to be given by the Chairman of the Federal Reserve Jerome Powell at the follow up Press Conference at 18:30 GMT. In some cases, comments made by the head of the Fed during the press question session reverse the initial market reaction to the statement.
On Friday, the US monthly employment data sets are bound to move the markets. At 12:30 GMT, the US Bureau of Labor Statistics will publish the Average Hourly Earnings, Non-Farm Employment and the Unemployment Rate. Better than expected data is set to strengthen the USD. Below forecast numbers are likely to cause a decline of the USD.
EUR/USD hourly chart analysis
In the case that the 1.0800 mark holds and provides support for a potential recovery of the Euro against the US Dollar, the rate might encounter resistance in the previous support levels. Namely, the 1.0825/1.0830 and 1.0840/1.0850 ranges are highly likely going to act as resistance. Meanwhile, note the additional resistance of the 50 and 100-hour simple moving averages near 1.0850. If all of these levels are passed, the weekly simple pivot point could come into play at 1.0861.On the other hand, an extension of the decline below 1.0800, is expected to look for support in the weekly S2 simple pivot point at 1.0784, before the rate reaches the 1.0745/1.0760 range and the weekly S3 at 1.0742.
Hourly Chart
EUR/USD daily chart's review
On the daily candle chart, the pair has passed below the 200-day simple moving average that held the EUR/USD up during the week prior.The decline would have to still pass below the 50 and 100-day SMAs at 1.0810 and 1.0785, before looking for support in the 1.0635/1.0700 range.
Daily chart
Read More: Technical Analysis
Traders are neutral
On Monday, Dukascopy traders were neutral, as 52% of all open position volume was in short positions.
Meanwhile, pending trader set up orders were also neutral. Namely, in the 100-point range around the pair 51% of orders were to sell and 49% were to buy.
On Friday, the open positions were 57% short and pending orders were 51% to sell.