During Monday morning, the EUR/USD currency pair traded near the one-year minimum located at 1.0971.
Given that the pair has been trading within the falling wedge pattern since the beginning of August, theoretically, it is likely, that a reversal north from the lower pattern line could occur.
US employment data set on focus
This 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 data 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, the EUR/USD renewed the one-year minimum located at 1.0971. During Monday morning, the pair was trading near the given level.From a theoretical point of view, it is likely that some upside potential could prevail in the market, as the exchange rate reversed north from the lower boundary of the falling wedge pattern. However, it is unlikely that the rate could exceed the 1.1041 mark due to the resistance of the weekly PP and the 55-hour SMA.
On the other hand, note that the market is closed today in the USA due to the national holiday. Thus, the Euro could consolidate against the US Dollar near the psychological level at 1.1000 within the following trading session.
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 the weekly and monthly S1s located circa the 1.0900 mark.
Daily chart
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Traders remain short
On Monday, 59% of open EUR/USD position volume on the Swiss Foreign Exchange was in short positions.
The sentiment slightly declined, as on Friday it was 60%.
A small portion had taken profits while the majority continued to short the EUR/USD.
Meanwhile, pending trade orders were still bullish, as 63% of orders in 100 pips range around the current rate were to buy and 37% were to sell.