A forecast decline occurred. On Friday morning, the EUR/USD had almost reached the 1.1030 level.
The rate was pushed down by the hourly simple moving averages, as it as speculated on Thursday.
In regards to the near term future, the rate is bound to test the support of the August low level at 1.1030.
No more data releases this week
This week's data releases have ended. See the reports in the Fundamental Analysis section.In regards to the next week, there are a couple of US data releases on the economic calendars that are shown as high impact.
On Tuesday, at 14:00 GMT the US ISM Manufacturing PMI might impact the EUR/USD rate. Since April the announcement has caused moves from 12.7 to 20.9 base points.
On Thursday, the US ADP Non-Farm Employment Change will be published at 12:15 GMT. Although, note that this is one of the releases that should not have a high impact mark and be discussed by financial media, as it has lost its power to impact the financial markets.
Due to that reason, since October 2018 our analysts ignored this data release. Recently, due to the possibility that it might have regained its strength, data was checked. Five minutes after the release there were moves from 5.3 to 9.7 pips on EUR/USD chart. A ten pip range is normal volatility for the EUR/USD.
On Friday, US employment data will be published. The event will have three numbers being revealed – the Average Hourly Earnings, Non-Farm Employment Change and Unemployment Rate.
Due to each of the numbers impacting the rate differently by pushing the value of the USD up or down and with a different strength, the event has a wide range. Namely, since April the EUR/USD has moved from 13.3 to 48 pips due to the US labour data.
EUR/USD hourly chart's review
On Friday morning, the EUR/USD had almost reached the August low level at 1.1030. The move was expected as various sell signals were presented on Thursday.In regards to the near term future, the rate is expected to test the 1.1030 level. Namely, if it falls below it during Friday's trading, the weekly S2 pivot point at 1.1015 should be reached.
On the other hand, the rate has experienced a sharp decline and the low level could hold. In that case scenario the EUR/USD would fluctuate sideways.
The sideways trading scenario is the more likely one, as by looking at the recent history of the rate, it can be observed that the current decline has overextended itself.
Hourly Chart
On the daily candle chart, there is no additional support to the currency exchange rate. The EUR/USD could fall down to the combination of S2 and a lower trend line of a massive scale channel down pattern at 1.1015.
Daily chart
Since Wednesday, 62% of open EUR/USD position volume on the Swiss Foreign Exchange was in short positions.
On Friday morning, the sentiment had slightly declined, as 60% of open position volume was short.
A small portion had taken profits while the majority continued to short the EUR/USD.
Meanwhile, pending trade orders were still neutral, as 53% of orders in 100 pips range around the current rate were to buy and 47% were to sell.