After touching the 1.1300 level on Wednesday, the EUR/USD declined after encountering this level.
The decline stopped at the combined support of the 100-hour SMA and a pivot point at 1.1218.
In general, the rate was expected to get squeezed in between 1.1220 and 1.1250.
The European Common Currency depreciated against the US Dollar, following the US ISM Non-Manufacturing PMI data release on Wednesday at 14:00 GMT. The EUR/USD exchange currency rate lost 16 pips or 0.15% right after the release. The Euro continued trading at the 1.1265 level against the Greenback.
Institute for Supply Management released the US ISM Non-Manufacturing PMI data, which came out better-than-expected of 56.9 compared with forecast of 55.6.
According to the official release: "he NMI registered 56.9 percent, which is 1.4 percentage points higher than the April reading of 55.5 percent. This represents continued growth in the non-manufacturing sector, at a slightly faster rate."
ECB incoming on Thursday
On Thursday, all attention will be on the European Central Bank. At 11:45 GMT the Monetary Policy Statement will be published. On the release the EUR/USD has moved from 10 to 35 pips.The event will be followed by the ECB press conference at 12:30 GMT. During the questions and answers session at the end of it the EUR is bound to make sharp moves.
At the same time the Canadian Trade Balance will be published. This event has caused moves from ten to sixty pips.
The week will end with the Canadian and US employment data being published at 12:30 GMT. This event consists of five different data sets being released.
For more details watch the Economic Calendar Overview. Moreover, feel free to ask questions for details.
EUR/USD hourly chart's review
On the hourly candle chart the EUR/USD is squeezed in. From the below there is the support of the pivot point at 1.1218 and the 100-hour SMA at 1.1220. Meanwhile, the resistance of the 55-hour SMA stands at 1.1249 and a pivot point is located at 1.1253.In general, watch for a break out. Most likely the break out will occur due to the ECB announcement or the press conference.
Hourly Chart
On the daily candle chart, the pair's sudden surge broke a dominant long term descending pattern. The move occurred because of the basic fundamentals of how the US Dollar is seen.
Namely, the Fed rate cut talk signals that there could be a larger supply of the USD. In that case its value would fall. If the market continues to think that it will become reality, the EUR/USD will go up because of the loss of value in the USD.
Moreover, this type of fundamental info always crushes technical charts.
However, take a look at the daily candle chart once more. Note that the 100-day simple moving average provided technical resistance to the currency rate and stopped the surge on Tuesday at 1.1280.
Daily chart
On Tuesday, 74% of open position volume on the Swiss Foreign Exchange was in short positions. By the middle of Wednesday's trading session the sentiment was 72% short.
On Thursday, traders were 71% short on EUR/USD. The sentiment has continued to decline.
Meanwhile, trader set up pending orders in the 100-pip range had become bearish. Namely, 56% of all orders were to sell.
The orders were neutral on Wednesday.