On Monday morning the EUR/USD broke resistance levels at 1.1240. Due to that reason the rate was expected to surge up to the 100-hour SMA at 1.2670.
If that level gets passed, the rate will reach back up to the 1.1300 level, where it was located before the ECB caused drop.
Busy start of the week
This week will be unusual. The majority of the notable macroeconomic events will take place at the start of the week.Namely, on Monday, the US Retail Sales and Core Retail Sales are set to be released at 12:30 GMT. This event might cause a reaction of up to 20 base points.
On Tuesday, the day will start with the UK GDP and Manufacturing Production data release at 09:30 GMT.
Afterwards, at 12:30 GMT the US Consumer Price Index and Core Consumer Price Index will be published.
The week's important events will end already on Wednesday. At 12:30 GMT the US Durable Goods Orders and the US Producers Price Index will be released.
Meanwhile, as the weekly economic calendar analysis stream has not been conducted, watch the live cover of the ECB Rate Statement, which caused the recent sharp drop.
EUR/USD hourly chart's review
During Friday's trading session, the European Single Currency broke through the resistance level of the 61.80% Fibo to end the trading session at the 1.1223 mark. On Monday morning, the rate broke the 55-hour simple moving average to trade at the 1.1247 mark.In regards to the near-term future, it is expected that the 55-hour simple moving average will retrace towards the 61.80 % Fibonacci retracement level at the 1.1203 mark.
On the other hand, today's US Retail Sales and Core Retail Sales data release at 12:30 GMT could push the rate to break the resistance of the 100-hour simple moving average to end the trading day at the 1.1280 level.
Hourly Chart
On the daily chart the pattern, which stopped the ECB drop can be observed better. However, note that it is located in the middle of a large scale descending pattern.
Meanwhile, take into account that all the daily simple moving averages have remained far above the currency exchange rate. It is a signal that the rate is oversold.
Better ignore this technical signal, as the currency supply is changing. The SMAs can be used in an environment, which does not have such news.
Daily chart
Traders closed their short term short positions already on Friday. On that day the total open position volume on the Swiss Foreign Exchange dropped to from 70% to 63% short.
It remained 63% short on Monday.
In the meantime, trader set up pending orders in the 100-pip range were also short. Namely, 57% of pending orders were set to sell.
Although some have taken profits, the open position proportion and orders still indicate that traders are bearish.