On Tuesday the EUR/USD was making another attempt to pass the resistance of the 1.1360 level, which forced the rate into a decline down to 1.1325 on Monday.
If the rate passes this level, it will immediately face the resistance of the monthly pivot point at 1.1365. Instead it is more likely that the pair will trade sideways until the support of the 55 and 100-hour simple moving averages push the rate higher.
The European Single Currency appreciated against the US Dollar, following the US CPI and Core CPI release on Tuesday at 12:30 GMT. The EUR/USD exchange currency rate gained 13 pips or 0.12% during a minute, right after the release. The European Single Currency kept going upwards after the data release to continue trading at the 1.1275 area against the US Dollar.
The Bureau of Labor Statistics released US CPI data that came out in line with expectations of 0.2%. Note, that the US Core CPI was released at the same time with the US CPI.
According to analysts at TD Securities: "Price pressures will benefit higher food and gasoline prices and another solid 0.2% increase in core CPI, leaving the latter unchanged at 2.2% y/y. There is a risk for a slight deceleration in the shelter, but we expect strength elsewhere, including tariff-related categories, medical care and airfares."
Busy week for fundamental events
This week will be busy for fundamental announcement traders. Both the central banks and various statistics offices are set to make various announcements.On Wednesday, at 09:30 GMT the UK Consumer Price Index will be released. This data release also is expected to be ignored by the markets due to the Brexit politics.
On the same day, at 18:00 GMT the Federal Reserve will publish their FOMC Statement, Economic Projections and the Federal Funds Rate. Moreover, the event will be followed by the FOMC Press Conference.
This event is above all else during this week, as the FOMC sets the value of the US Dollar. In general, the rest of the world's central banks just adapt to the Federal Reserve.
On Thursday, all attention will be on the UK events. At 09:30 GMT the UK Retail Sales will be published. Afterwards, at 12:00 GMT the Bank of England will announce their official Bank Rate and Monetary Policy Summary. The BoE in general is expected to react to the recent Brexit developments and the Federal Reserve.
On Friday, there will be two notable data releases. At 08:30 GMT the German Markit PMIs will be released. They are expected to cause a significant impact on the EUR pairs.
The last event of the week will be the Canadian CPI and Core Retail Sales release at 12:30 GMT.
For more information watch this week's economic calendar analysis stream.
EUR/USD hourly chart's review
During Monday's trading session, the European Single Currency depreciated against the US Dollar to 1.1320. On Tuesday morning, the rate recovered itself to the 1.1354 mark.In regards to the near-term future, it is expected that the rate will surge to the monthly pivot point at the 1.1364. Besides, the rate might break the resistance level of the monthly pivot point to trade at the 1.1360 level.
However, the monthly pivot point at the 1.1364 mark could retrace the currency exchange rate to push it to the 1.1340 level.
Hourly Chart
On the daily chart the rate is trading in a long term descending channel pattern.
The rate is about to touch the upper trend line of the pattern and begin a decline, if the resistance holds.
The trend line is not standing as a single technical resistance levels. It is strengthened by the 55 and 100-day simple moving averages and the monthly pivot point. This combination at 1.1365 is most likely going to hold.
Daily chart
On Monday, 73% of total open position volume on the Swiss Foreign Exchange was short. By the middle of Tuesday's trading the sentiment was only 70% 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, most traders remain short on the EUR/USD, expecting a decline that might occur after the recent surge.