The EUR/USD currency exchange rate seems to be beginning the expected decline. However, that is still to be seen. It is highly possible that all of the technical analysis will become mostly obsolete, as there is a very important fundamental event set for the day, as Mario Draghi is set to speak on monetary policy at 13:00 GMT.
The US economy expanded at a stronger-than-initially expected pace in the March quarter; however, an economic slowdown remained on the table in the second quarter. The Commerce Department reported on Friday that Q1 GDP growth came in at a seasonally adjusted annualized pace of 1.2%, compared to an originally reported pace of 0.7%. Meanwhile, analysts expected the economy to expand 0.9% in the reported quarter. However, that was the worst performance over the past 12 months.
Mario Draghi Speaks at 13:00 GMT
EUR/USD trades below 1.12 mark
On Monday morning the common European currency began the week against the US Dollar below the resistance near the 1.1190 level. Near that level, at 1.1187, is located the monthly R2, and exactly at the 1.1190 mark resides the 61.80% Fibonacci retracement level. The currency exchange rate is expected to decline down to the first weekly support level, which is located at the 1.1141 mark. As it is a lone support level, it is highly possible that it will be passed and the pair will set its course for the weekly S2 at 1.1097.
Daily chart
Hourly chart
Read More: Technical AnalysisTraders optimistic towards the US Dollar
SWFX traders remain bearish, as 60% of open positions are short. However, only 51% of trader set up orders are to sell the Euro.
OANDA traders remain largely bearish, as 67.09% of open positions are short on Monday compared to 69.90% previously. In addition, SAXO bank clients are likewise bearish, as 63.52% of open positions are short, compared to 65.17% on Friday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.11 in late August
Traders, who were questioned on their longer-term views on EUR/USD between April 29 and today expect, on average, that the currency pair may trade slightly above 1.11 in late August. In general, 55% (-3%) of participants believe the exchange rate will be above 1.10 in the following ninety days, and 44% (-1%) see it above 1.12.