The decline of the EUR/USD continues, as traders take advantage of it. Namely, the rate has been testing the support of the weekly S1 at the 1.1390 mark.
The currency exchange rate is expected to eventually pass this support level and reach down to the monthly pivot point at the 1.1330 level.
The European Single Currency appreciated against the US Dollar, following the US CPI and Core CPI release on Friday at 13:30 GMT. The EUR/USD exchange currency rate gained 9 pips or 0.08% during a minute, right after the release. The European Single Currency continued trading at the 1.1455 area against the US Dollar.
Note that the US consumer prices dropped for the first time in nine months. The Bureau of Labor Statistics released US CPI data in line with expectations of negative 0.01%. Note, that the US Core CPI was released at the same time with the US CPI.
The U.S. Bureau of Labor Statistics reported on Friday, "The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.1 percent in December on a seasonally adjusted basis after being unchanged in November,"
Inflation reports and Brexit
On Wednesday, fundamental events continued in full force. The UK Parliament was set to vote in a confidence vote, which would remove Theresa May from her post.Meanwhile, macro release traders were looking forward to the weekly US Energy Information Administration Crude Oil Inventories at 15:30 GMT. The event causes larger than one percent moves in oil prices each week.
Besides a speech at the G20 Meetings by Bank of Japan's Governor Kuroda at 03:20 GMT, there is nothing on Thursday to watch.
On Friday, two data releases will be covered by Dukascopy Analytics.
At 09:30 GMT the UK Retail Sales will be published. Around 10-40 base point move can be expected during the event.
The biggest event of the will occur at 13:30. The Canadian CPI will be published. On the USD/CAD there are 30 pip moves even when it hits the forecast. When the data is different there have been 40-85 pip moves.
EUR/USD daily review
On Wednesday, the currency exchange rate was trading above the monthly pivot point at 1.1443. Besides, the weekly S1 at 1.1390 supported the European Single Currency during the morning hours!It is expected that the rate will continue depreciating during the trading session due to the resistance levels of the monthly PP and the weekly S1. Most likely, the rate will fall to the 1.3600 level.
On the other side, today's US Crude Oil Inventories data release at 15:30 GMT could push the rate to surge to the 1.1440 level.
Hourly Chart
On the daily chart the pair has reached the support of the 55-day simple moving average, which is strengthening the weekly S1 at 1.1390.
Also note that on this scale the monthly S1 at the 1.1330 level is strengthened by the lower trend line of the ascending pattern, which has guided the EUR/USD since the middle of November.
Daily chart
Traders of the Swiss Foreign Exchange are 66% short on the EUR/USD. Gradually they have been closing short positions, as the sentiment was previously more bearish.
Meanwhile, trader pending orders in the 100-pip range were set to sell in 51% of cases. Previously, the orders were set to buy.
It indicates that the closing of the short positions might not continue, as there are no clear buy orders close by that would open long positions or close the shorts.
It indicates that the 66% of trades that are short have a longer term strategy.