On Tuesday, the EUR/USD plummeted, as soon as the 100-hour simple moving average's technical support was passed.
By the middle of the day's London trading hours, the currency exchange rate had reached down to 1.1230 and was expected to continue to decline.
Latest Fundamental Event Report
The European Common Currency traded sideways against the US Dollar, following the US PPI data release on Friday at 12:30 GMT. The EUR/USD exchange currency rate lost 4 pips or 0.03% right after the release. The Euro continued trading at the 1.1245 level against the Greenback.
Bureau of Labor Statistics released the US PPI data, which came out in line with the expectations of 0.1%.
According to the official release: "Final demand prices moved up 0.1 percent in May and 0.2 percent in April. On an unadjusted basis, the final demand index rose 1.7 percent for the 12 months ended in June, the lowest rate of increase since advancing 1.7 percent in January 2017.The index for final demand less foods, energy, and trade services was unchanged in June following advances of 0.4 percent in both April and May. For the 12 months ended in June, prices for final demand less foods, energy, and trade services climbed 2.1 percent."
One event for the EUR/USD
The EUR/USD this week will be affected only by one macroeconomic data release.
Namely, the US Retail Sales and Core Retail Sales that will be published on Tuesday at 12:30 GMT can cause a notable reaction.
The event has caused moves from 9.0 to 24.3 pips since March.
EUR/USD hourly chart's review
On Tuesday morning, the EUR/USD was declining below the support levels at 1.1250. In general, the rate passed its technical support levels during the moments that they stood each on its own.From a technical analysis theoretical perspective, the currency exchange rate should decline, as it has no tech support as low as the 1.1220 level where a monthly pivot point is located at.
On the other hand, the sharp decline could stop and the currency exchange rate could consolidate by trading sideways.
Hourly Chart
On the daily candle chart, the recent decline is consistent with the on Monday added medium term descending channel pattern. Moreover, note that the support of the 55 and 100-day simple moving averages was passed during Tuesday's decline.
Daily chart
Since Monday, 72% of open EUR/USD position volume on the Swiss Foreign Exchange was in short positions.
These traders were profiting from the decline.
Meanwhile, trader set up pending orders in 100-pip range around the pair were almost neutral, as 53% of all orders were set to sell and 47% were to buy. The orders had not changed since Monday.