At the 1.2162 level, the pair encountered this week's simple S1 weekly pivot point, which could provide the rate with support.
Economic Calendar Analysis
During the week there will be minor data sets published, which could cause initial reactions of up to 20 pips. Traders with close by tight stop losses should take into account the times of the macroeconomic data releases.
On Wednesday, the United States Bureau of Labor Statistics is set to publish the Consumer Price Index and Core Price Index at 13:30 GMT. The EUR/USD has moved from 6.1 to 23.8 pips on the release since August.
On Thursday, at 07:00 GMT the German Preliminary GDP could cause a move on Euro pairs. In July and October, the EUR/USD moved 10.0 and 14.1 pips on the publication.
Afterwards, at 13:30 GMT, expect the weekly US Unemployment Claims. Despite the attention this release gets, we do not recommend monitoring it closely, as the last two releases caused moves below ten base points on the EUR/USD. Namely, the rate moved less than 10 pips in ten minutes. That is in the range of normal volatility.
The week will end with the publication of the US Retail Sales and US Core Retail Sales at 13:30 GMT. In November and December, these data sets caused an increase of volatility above the average.
Click on the link below to find out more about the data releases of this and other currency exchange rates.
EUR/USD hourly chart's review
It is likely that the exchange rate could gain support from the weekly S1 at 1.2162 and reverse north in the nearest future. In this case the rate could try to exceed the resistance area formed by the 55-, 100– and 200-hour SMAs, as well the weekly PP in the 1.2245/1.2270 range.However, if the predetermined support level does not hold, some downside potential could prevail in the market, and the currency pair could decline to the weekly S2 at 1.2099.
Hourly Chart
On the daily candle chart, the rate has broken the channel up pattern, which has guided the rate since the start of November. It signals that the rate had ended its medium term surge.
Meanwhile, note that the closest by technical support on the daily candle chart is the 55-day SMA and a 23.60% Fibonacci retracement level near 1.2000.
Daily chart
Read More: Technical Analysis
Short sentiment declines
On Monday, on the Swiss Foreign Exchange trader open positions were bearish, as 62% of open position volume was in short positions.
During Friday's trading hours, the sentiment was 65% short.
Meanwhile, trader set up pending orders in the 100-pip range around the pair were 74% to buy the pair.