However, the rate had pierced the support of the 1.1080 level. Moreover, the rate failed two times to pass resistance levels near 1.1100. These facts combined signal that the currency exchange rate would decline.
Economic Calendar Analysis
On Thursday, the European Central Bank will announce its Main Refinancing Rate at 12:45 GMT. Also, the Monetary Policy Statement will be published.
On Friday, the German Flash Manufacturing and Services PMIs survey results will be published at 8:30 GMT.
Meanwhile, the week's scheduled event historical data tables have been published. Click on the link below to read the article.
Read More: 20.01-24.01 Event Historical Reactions
EUR/USD hourly chart's review
During Thursday's morning GMT hours, the EUR/USD rate traded below the resistance of the 55-hour SMA at 1.1089 and above the support of the 1.1080 level.In the meantime, the exchange rate was being approached by the resistance of the 100-hour simple moving average. The SMA stopped the rate's surge on Wednesday.
In general, it was expected that the 100-hour SMA would strengthen the 55-hour SMA and push the rate down to the pivot point that is located at 1.1061.
Hourly Chart
On the daily candle chart, the pair is being squeezed in between the 55 and 100-day simple moving averages. The 55-day SMA on Thursday was located at 1.1096, and the 100-day SMA was at 1.1073.
Moreover, the rate's decline, after piercing the support of the 1.1080 level, was stopped by the 100-day SMA. Due to that reason it is advised to watch the daily candle chart closely during the near future.
In the meantime, if the 100-day SMA continues to move upwards and the 55-day SMA remains flat, the rate might get squeezed in between them. A squeeze would result in a break out up or down. In the case of a larger break out upwards, the pair could reach for the 200-day SMA, which on Thursday was located near 1.1135.
On the other hand, a break out downwards would have no technical support as low as 1.0916. Although, it is highly likely that the 1.1000 level would provide the support that round levels usually have. For example, note that the 1.1000 stopped two declines in November.
Daily chart
Read More: Technical Analysis
Traders are still short on EUR/USD
Since the middle of Monday's London trading hours, 61% of open EUR/USD position volume on the Swiss Foreign Exchange was in short positions.
On Thursday, the sentiment had slightly changed, as 59% of volume was in short positions.
Meanwhile, set up pending orders were slightly bullish, as 54% of orders in the 100-pip range were to buy and 46% were to sell.
Orders were 51% to sell on Wednesday.