The hourly simple moving averages provided enough technical resistance on Wednesday, to cause a sharp drop down. The decline went as low as 1.1130 before a consolidating retracement back up started.
The low point of 1.1130 was used to draw a descending channel pattern, which captures the decline that started on Tuesday.
In regards to the near term future, the rate was expected to meet with the upper trend line of the pattern near 1.1160.
Economic calendar
On Thursday, the US Retail Sales are expected to cause a move at 12:30 GMT. Note that this release will consist of two numbers. Namely, Retail Sales and Core Retail Sales.
The Core Retail Sales do not include auto sales. People buy cars on debt, paying the same amount of money each month and continue to buy the needed transportation no matter what. The elimination of auto sales improves retail sales as a measure of economic growth.
The data release since April has caused moves from 9 to 24.3 base points.
EUR/USD hourly chart's review
On Thursday morning, the EUR/USD was recovering after the Wednesday's drop. Moreover, the rate had revealed a channel down pattern, which captures the decline that has been occurring since early Tuesday.In general, the rate was expected to continue to surge until it reaches the upper trend line of the channel down pattern at 1.1160. At that level the rate would also meet a broken lower trend line of another pattern.
After reaching the 1.1160, in consistency with the pattern, the rate would resume its decline.
On the other hand, the resistance might not hold on its own and the rate surge up to the 55- hour SMA and a monthly pivot point, which are at 1.1169.
Hourly Chart
On the daily candle chart, it could be observed on Thursday, that the pair has clearly made many failed attempts to pass the resistance of the 55 and 100-day simple moving averages near 1.1230. The failed attempts have been followed by a decline.
Meanwhile, the rate has only the support of the weekly S1 pivot point at 1.1122 that could slow down a decline down to the 1.1050 level.
Daily chart
On Monday, on the Swiss Foreign Exchange 74% of open EUR/USD position volume was in short positions.
Since then the sentiment had been decreasing by one percent each day. By the middle of Thursday's trading session the sentiment was 70% short.
Since Tuesday, trader set up pending orders in 100-pip range around the pair were bearish, as 56% of all orders were set to sell and 44% were to buy.