In general, the recent surge of the Euro against the US Dollar has been two sided. The US Dollar has declined due to a risk-on sentiment. Namely, market participants have moved from cash into the ongoing stock and other asset recovery.
Meanwhile, the European Central Bank has, first of all, sent a letter to banks to reduce lending. Secondly, comments have been made that the bank might return to zero percent interest rates from the negative zone. In addition, major inflation records have been hit in Spain and Germany. Inflation not seen since 1985 in Spain and the 1970s in Germany is a clear indicator that the European monetary policy has to be tightened to stop the price surge.
Economic Calendar Analysis
On Thursday, at 13:30 GMT, minor US Dollar moves could occur due to the publication of the weekly US Unemployment Claims.
The top event of the week will occur on Friday, as at 13:30 GMT the US Average Hourly Earnings, Non-Farm Employment Change and Unemployment Rate are set to be published.
The week's events are scheduled to end at 15:00 GMT with the publication of the US Institute for Supply Management Manufacturing Purchasing Managers Index survey results.
Click on the link below to find out more about data releases of this and other currency exchange rates.
EUR/USD hourly chart's review
If the Euro continues appreciate in value, compared to the US Dollar, the EUR/USD could encounter resistance in the upper trend line of a channel up pattern, which captures the pair's March surge. In the meantime, note the 1.1200 and 1.1250 levels, which might act as resistance.On the other hand, a decline of the currency pair would look for support in the weekly R2 simple pivot point at 1.1114. Below the pivot point, the 1.1100 mark is expected to provide support, before reaching the 1.1050 mark. Note that the 1.1050 mark is being strengthened by the 50-hour simple moving average and the weekly R1 simple pivot point at 1.1048.
Hourly Chart
EUR/USD daily chart's review
On the daily candle chart, the rate has succeeded on its third attempt at passing the zone of the January and February low levels and March high levels. However, the pair has encountered resistance in the 50-day simple moving average.Higher above, note the 38.20% Fibonacci retracement level at 1.1200 and the 100-day simple moving average at 1.1240.
Daily chart
Read More: Technical Analysis
Traders remain long
On Wednesday, on the Swiss Foreign Exchange trader open positions were long, as 61% of open position volume was in long positions.
Meanwhile, trader set up pending orders in the 100-pip range around the pair were 62% to sell the Euro against the USD.
On Tuesday, the sentiment was 63% long and pending orders were 62% to sell.