In the near term future, the rate could look for support in the 1.2050 mark, a weekly S1 simple pivot point at 1.2045 or the 1.2020 level.
Economic Calendar Analysis
The week is expected to have a lot of data releases, which could impact the currency exchange rate from both the EUR and USD sides.
On Wednesday, at 13:30 GMT, the US Retail Sales and Core Retail Sales could cause a move of 6.0 to 14.0 pips, as it has done since September. However, at the same time, the US Producer Price Index and Core Producer Price Index are set to be published. This event has caused moves from 6.9 to 10.9 pips and an anomaly of 48.9 pips occurred in September.
If both data sets reveal a positive or negative surprise, compared to the market forecast, the impact could be combined. On the other hand, the data could contradict one another and cancel out the effect of an impact.
On the same day, at 19:00 GMT the FOMC Meeting Minutes PDF document will be released. Note that the impact of the meeting minutes occurs slowly not suddenly, as the market participants read and interpret the meeting minutes.
On Thursday, market participants are set to watch the weekly US Unemployment Claims at 13:30 GMT. However, this event has not caused any volatility since January 21, when a 16.4 pip move occurred.
Friday will be the day that the Markit Purchasing Managers Indices are published. These survey results reveal what various sector purchasing managers are thinking about the future outlook of their respective sectors. In general, the markets look at the results of the services and manufacturing sectors.
Note that the European PMIs are chopped up. Namely, the surveys are done for various countries and the results are published at different times. This fact spreads out the impact.
The French PMIs are scheduled to be released at 08:15 GMT and could cause an initial move of 9.0 to 20.3 pips. The German survey results will be out at 08:30 GMT and they have created moves from 10.4 to 41.5 pips since September. At 09:00 GMT, the European releases will end with the combined Euro Zone results that could cause an additional move from 7.0 to 13.0 pips.
In addition, take into account that survey data from various countries can show various sentiment. Namely, the French could be pessimistic and cause a drop of the EUR and, afterwards, good results from Germany could create a surge of the European common currency.
The week will end for the EUR/USD with the US PMIs at 14:45 GMT. The release could cause a move from 7.8 to 26.4 pips.
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
The EUR/USD currency exchange rate was expected to continue the decline, as it could look for support in the 1.2050 level and the 1.2045 level, where the weekly S1 simple pivot point was located at.In the case of these levels failing to provide support, the rate could reach for the January low level of 1.2020. If the 1.2020 does not hold, the 1.2000 mark could be reached.
On the other hand, a potential recovery would most likely find strong resistance at the 1.2100 level. This level is not only bound to provide psychological resistance, but is also strengthened by the 200-hour simple moving average and the weekly simple pivot point.
Hourly Chart
On the daily candle chart, it appears that the Tuesday's breaking of the 2021 channel down pattern was a fake break-out or a "piercing" of the pattern. However, it still signals that the pattern could be broken.
In the case of the rate properly breaking out of the pattern, it could test the late January high level at 1.2200. This level caused the rates January 20/February 5 decline.
Meanwhile, take into account that there is additional support on the daily candle chart at the 1.2000 mark. Namely, a 23.60% Fibonacci retracement level and the 100-day simple moving average were strengthening this level.
Daily chart
Read More: Technical Analysis
Traders are almost short
Since Monday, on the Swiss Foreign Exchange trader open positions were short, as 55% of open position volume was in short positions.
The sentiment changed on Wednesday, as traders were 53% short.
Meanwhile, trader set up pending orders in the 100-pip range around the pair were 67% to buy the pair.
The orders were 72% to sell on Tuesday.