The EUR/USD has surged above the upper trend line of an ascending pattern. That way the pair has gained even more than previously expected.
In regards to the near term future, traders have to watch the daily candle chart to see that the rate is being kept down by the 55-day simple moving average.
The European Single Currency depreciated against the US Dollar, following the EU Main Refinancing Rate release on Wednesday at 11:45 GMT. The EUR/USD exchange currency rate lost 3 pips or 0.02% during a minute, right after the release. The European Single Currency continues trading at the 1.2760 area against the US Dollar.
The European Central Bank released the EU Main Refinancing Rate data in line with expectations of 0.00%.Note, that the Monetary Policy Statement was released at the same time with the ECB Main Refinancing Rate.
"The Governing Council now expects the key ECB interest rates to remain at their present levels at least through the end of 2019, and in any case for as long as necessary," the ECB said in a statement, reaffirming its interest rate guidance.
Watch the Economic Calendar analysis
This week has notable data releases that will both cause significant moves in various currency pairs and be covered by Dukascopy Analytics.During Monday's trading session this week's Economic Calendar Overview video will be published. In that you can take a look at the scheduled data releases and ask questions in the comments.
Data releases will start on Tuesday. On that day the UK Average Earnings Index will be published at 08:30 GMT.
On Wednesday, the UK Consumer Price Index will be released at 08:30 GMT. Afterwards, at 12:30 the Canadian CPI and Trade Balance will be released. This is expected to cause the biggest impact during this week.
The data flow will end on Thursday. The European Manufacturing PMIs will be released at 07:15 GMT and 07:30 GMT. Dukascopy Analytics will cover the 07:30 GMT, as at that time the German PMI will be published. The German data causes the biggest reaction on EUR pairs.
An hour later, at 08:30 GMT, the UK Retail Sales will be published.
Last but not least, the Canadian and US Retail Sales will be published at 12:30 GMT. Both data sets combined could cause a move on the USD/CAD of up to 30 pips.
Meanwhile, check out previous data release covers and economic calendar analysis on the Dukascopy Webinars YouTube channel.
EUR/USD hourly chart's review
The EUR/USD has surged above the upper trend line of an ascending channel pattern, which guided the pair up throughout April.After the breaking of the upper trend line the trade had no technical resistance as high as the 1.1345 level. At that level the first weekly resistance of the simple pivot points was located at. In general, the rate was expected to slowly reach this level.
On the other hand, the rate might trade sideways until the support of the 55-hour simple moving average catches up and pushed it higher.
Hourly Chart
The daily chart reveals that the resistance of the 55-day simple moving average is keeping the rate down. The technical analysis level stopped the surge on Friday.
At the moment this level is the top one to watch. Only if it is broken the rate will have a free range to surge up to the 1.1345 level.
Daily chart
Despite the recent surge most of the open EUR/USD positions on the Swiss Foreign Exchange were still short. Since Thursday, 72% of all of the open volume was short.
It is assumed that it is that way because last week the ECB confirmed that it is continuing its money creation scheme. Meanwhile, the US Federal Reserve keeps their policy unchanged. Due to that reason the EUR/USD should go down on the larger scale.
Combine that with the recent short term surge, after which a decline should take place, it is clear why most traders are short on the pair.
Moreover, trader set up pending orders in the 100-pip range were bearish. Namely, 56% of all orders were set to sell.