On Thursday, the EUR/USD traded above a 38.20% Fibonacci retracement level, which was keeping the rate up at 1.1200. Moreover, during the morning hours the rate was also being supported by the 55-hour simple moving average.
In general, a test of the weekly R2 pivot point at 1.1234 was expected. If this level gets passed, the 1.1280 level could be reached.
The European Common Currency traded sideways against the US Dollar, following the US Non-Manufacturing PMI data release on Monday at 14:00 GMT. The EUR/USD exchange currency rate gained 6 pips or 0.05% right after the release. The Euro continued trading at the 1.1195 level against the US Dollar.
Institute for Supply Management released the US Non-Manufacturing PMI data, which came out worse-than-expected of 53.7 compared with the forecast of 55.5.
Anthony Nieves, Chair of the Institute for Supply Management (ISM) Non-Manufacturing Business Survey Committee commented: "The NMI registered 53.7 percent, which is 1.4 percentage points lower than the June reading of 55.1 percent. This represents continued growth in the non-manufacturing sector, at a slower rate. This is the index's lowest reading since August 2016, when it registered 51.8 percent. Respondents indicated ongoing concerns related to tariffs and employment resources. Comments remained mixed about business conditions and the overall economy."
Economic calendar
During this week there are no more scheduled data releases that might significantly impact the EUR/USD.
EUR/USD hourly chart's review
On the hourly chart it can be observed that the rate has been finding support in the 1.1200 level, which is both providing psychological support and is the location of a 38.20% Fibonacci retracement level.In general, the rate was expected to reach for the weekly R2 at 1.1234 and attempt to pass this resistance level. If the pair surges above it, the monthly pivot point at 1.1278 will be approached next.
On the other hand, the rate might trade sideways between 1.1200 and 1.1230 until the 100-hour SMA approaches and provides additional technical support. On Thursday morning, the 100-hour SMA was located at 1.1177.
Hourly Chart
On the daily candle chart it can be observed that the EUR/USD bounced off the lower trend line of a large scale descending channel pattern.
On Tuesday, the rate had reached the combined resistance of the weekly R2 and the 55 and 100-day simple moving averages near 1.1230. By doing this the EUR/USD has removed some of the oversold pressure.
Daily chart
Since the middle of Wednesday's London trading session traders were short, as 71% of open EUR/USD position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, trader set up pending orders in 100-pip range around the pair were almost neutral, as 52% of all orders were set to sell and 48% were to buy.