The release of the European Manufacturing and Services PMIs caused a sharp drop of the Euro. The total decline of the rate from 06:00 GMT to 08:00 GMT was almost 60 base points.
Due to that reason, previous forecasts are still valid and the markets wait for the end of the consolidation to see action.German Flash Manufacturing and Services PMIs
The European Common Currency depreciated against the US Dollar, following the German Flash PMIs survey results release on Monday at 07:30 GMT. The EUR/USD exchange currency rate lost 15 pips or 0.14% right after the release. The Euro continued trading at the 1.0975 level against the US Dollar.
Markit released the German Manufacturing PMI survey result, which came out worse-than-expected of 41.4 compared with the forecast of 44.6.
According to the official release: "The German economy contracted in September, latest flash PMI data showed, as the downturn in manufacturing deepened and service sector growth lost momentum. Job creation meanwhile stalled as firms reported weakening demand and pessimism towards the outlook for activity. The fall in output was accompanied by easing price pressures, with average charges for goods and services rising at the slowest rate for over three years."
US Releases Might Cause Minor Moves
On Thursday, the US Final GDP will be published at 12:30 GMT. This event has caused moves on the EUR/USD from 5.2 to 26.4 pips since June 2018.
Note that during the last two releases the pair moved only 5.2 and 7.6 pips, which is irrelevant.
The week will end with the US Durable Goods Orders data release at 12:30 GMT. The event will consist of the release of US Durable Goods Orders and US Core Durable Goods Orders.
This event has caused almost insignificant moves since April, as the EUR/USD moved from 5.4 to 10.9 pips. Due to that it is concluded that this event that is tagged as high impact on economic calendars, is not notable enough to be watched.
EUR/USD hourly chart's review
After the decline caused by the PMIs, the EUR/USD stopped at the 1.0970 level. From this level a consolidating surge began, which reached above the weekly S1 pivot point.The pivot point was expected to provide support to the currency exchange rate at 1.0979. If it gets passed, the rate could decline down to the support of the weekly S2 at 1.0937.
On the other hand, the recovery of the rate might surge up to the resistance cluster from 1.1030 to 1.1040 level. The cluster consists of the simple weekly PP and the 55, 100 and 200-hour simple moving average.
Hourly Chart
On the daily candle chart, the rate's decline was consistent with the long term descending channel pattern. The rate has clearly broken off the upper trend line of the pattern.
The rate should continue to decline in the pattern until the middle of October.
Daily chart
Since last Tuesday, 66% of open EUR/USD position volume on the Swiss Foreign Exchange was in short positions.
These positions most likely are in the green, as the rate is clearly below last Tuesday's levels.
Meanwhile, pending trade orders were mostly to buy, as 70% of orders in the 100-pip range were set to buy. It was assumed that these are stop losses and take profits of the short positions and buy to open long orders in case of a retracement back up.
Previously, 58% of orders were to sell.