A new high level has been reached by the EUR/USD. Namely, the pair had reached the 1.1340 level and bounced off it.
By the middle of Thursday's trading session the rate was retreating to the 1.1300 level. That level together with the support of the 55-hour SMA is expected to cause a resumption of the surge.
The European Single Currency depreciated against the US Dollar, following the US Retail Sales data released on Monday at 13:30 GMT. The EUR/USD exchange currency rate shortly dropped 9 pips or 0.08% during the minute right after the release. The European single currency continued trading at the 1.1242 area against the US Dollar
The Census Bureau released US Retail Sales data that came out better than expected of 0.2%, compare to forecasted 0.0%. Note, that the US Core Retail Sales was released at the same time with the US Retail Sales.
"Sales managed only a tepid reversal in January from December's deep freeze," said Douglas Porter, chief economist at BMO Capital Markets in Toronto. "While we expect some further comeback in the next couple months, the big story is that the economy's big engine is cooling."
No more data releases this week
The week's important macroeconomic data releases have ended. Join on Monday to the Economic Calendar analysis stream on the Dukascopy Analytics YouTube channel to watch what is next.In the meantime, take into account that the Brexit turmoil is still occurring in the British Parliament. That event has taken up most attention of all Forex fundamental traders.
EUR/USD hourly chart's review
On Thursday the EUR/USD was retreating after the attempt made to pass the resistance of the 1.1340 level.In general, the rate was expected to reach down to the 1.1300 mark. At that level it is set to find psychological support in the 1.1300 level. Moreover, that level is expected to be strengthened by the technical support of the 55-hour simple moving average.
If the pair finds enough support in those levels, it will resume the move upwards. On the other hand, the support levels might fail and a decline to the 200-hour SMA at 1.1284 could occur.
Hourly Chart
On the daily chart the rate is trading in a long term descending channel pattern.
Recently the currency exchange rate bounced off the pattern's lower trend line and gained enough strength to surge through the pivot points at 1.1240 and 1.1265.
Due to that reason on the daily chart the EUR/USD has no resistance as high as the 1.1354 level.
Daily chart
The total open position volume on the Swiss Foreign Exchange remains mostly short. Moreover, the short sentiment has increased.
Previously, 66% of the open position volume was short. By the middle of Thursday's trading session the sentiment had become 72% short.
In addition, trader set up pending orders in the 100-pip range were also short. Namely, 55% of pending orders were set to sell.
In general, a majority of traders are either already short on EUR/USD or have set up pending sell orders that would open short positions as a decline begins.