EUR/USD got squeezed in on Friday. By the middle of Monday the rate was located between strong support at 1.1180 and the resistance levels at the 1.1200 level.
Two scenarios are outlined in the hourly chart's analysis.
On Wednesday, May 1, the Federal Open Market Committee decided to left the key benchmark rate unchanged at the 2.50% level.
The US policymakers remain to use "wait-and-see" approach described earlier this year ahead of June's updated economic forecasts.
Surprisingly, the Fed cut the IOER (Interest Rate on Excess Reserves) rate by 0.05% to 2.35%. Analysts think that this reduction might signal the beginning of an easing cycle.
Nothing for USD until Thursday
This week all the action on the US Dollar from a fundamental side will be in the second half of the week. Meanwhile, there are large events to watch prior to that.On Tuesday, the Reserve Bank of Australia might cause moves up to 40 pips on Aussie pairs. At 04:30 GMT the RBA cash Rate is announced. Dukascopy will have a preview video on the Dukascopy Webinars YouTube channel.
On Wednesday, at 02:00 GMT the Reserve Bank of New Zealand will make their rate announcement. This event has caused moves larger than 100 pips during the last two announcements. If you trade sudden moves, get on this, stay late or wake up early.
On Thursday, the usual data starts. At 12:30 GMT the Canadian Trade Balance and the US Producers Price Index will be released. These events can cause a move from five to eighty pips. The range is explained in the weekly Economic Calendar Overview video.
On Friday, there will be two times to watch the calendar.
At 08:30 GMT the UK GDP and Manufacturing Production will be published. This event can cause a move of fifteen to twenty pips.
At 12:30 GMT the Canadian Employment data will cause a move of about forty pips. At the same time the US Consumer Price Index release should cause a move of up to twenty pips. Combined they can have various impacts on the Forex market.
Watch this week's economic calendar analysis and leave comments with questions about the specifics.
EUR/USD hourly chart's review
EUR/USD is facing a strong resistance cluster on Monday. Namely, at the 1.12000 level there are three technical levels that keep the rate down. Namely, the weekly pivot point, 100-hour simple moving average and the 38.20% Fibonacci retracement level were located near 1.1200.Meanwhile, the rate was being kept up by the support of the 55 and 200-hour simple moving averages near 1.1180. Due to that reason it was expected that the currency exchange rate will trade sideways.
Moreover, it should consolidate in the aftermath of Friday's surge. On the other hand, the support might fail at any moment, as on Thursday, the strength of two simple moving averages was eventually overcome and the rate dropped.
Hourly Chart
On the daily candle chart, the massive scale patterns have been adjusted. In general, the rate is set to be squeezed in between the resistance of a dominant pattern and the support of a junior.
This should result in a break out by the start of summer.
Meanwhile, note that the 55 and 100-day SMAs were providing resistance near 1.1276 and 1.1331.
Daily chart
Since Friday, on the Swiss Foreign Exchange 72% of the total open position volume was in short positions.
Meanwhile, trader set up pending orders in the 100-pip range were bullish. Namely, 54% of all orders were set to buy.
Previously, the orders were set to sell. The recent surge has scared away possible new sellers.