During Thursday morning, the EUR/USD currency pair was testing the resistance level formed by the 200-hour SMA and the weekly PP at 1.1041.
If the given resistance holds, a reversal south could occur soon. Also, the pair could consolidate near the given resistance.
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.
Today, 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
Yesterday, the EUR/USD currency pair tried to surpass the resistance level formed by the 200-hour SMA and the weekly PP at 1.1041. During Thursday morning, the pair was trading near the given level.If the given resistance holds, it is likely that some downside potential could prevail in the market in the short run. Note that the exchange rate could gain support of the 55- and 100-hour SMAs, currently located circa 1.0990.
On the other hand, the Euro could trade sideways against the US Dollar near the given resistance. If it does not hold, it is unlikely, that the pair could exceed the monthly PP at the 1.1069.
Hourly Chart
On the daily candle chart it can be seen that the EUR/USD exchange rate is testing the resistance formed by the weekly and the monthly PPs, located circa 1.1050.
If the given resistance holds, a reversal south could occur in the nearest future. Otherwise, some upside potential could prevail.
Generally, it is unlikely that the rate could exceed the Fibonacci 61.80% retracement at 1.1203 in the medium term.
Daily chart
Read More: Technical Analysis
Traders go short
On Thursday, 59% of open EUR/USD position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, pending trade orders were slightly bearish, as 54% of orders in 100 pips range around the current rate were to sell and 46% were to sell.