As forecast, the EUR/USD has broken the resistance of the 200-hour SMA and surged higher. On Wednesday, the rate was expected to continue its surge higher, as it was testing resistance at 1.1239.
If the rate breaks the weekly R1 at 1.1239, it should reach the 1.1300 level because the pair has no technical resistance as high as 1.1320.
The European Common Currency depreciated against the US Dollar, following the US Advance GDP data release on Friday at 12:30 GMT. The EUR/USD exchange currency rate lost 24 pips or 0.22% right after the release. The Euro continued trading at the 1.1145 level against the US Dollar.
Bureau of Economic Analysis released the US Advance GDP data that came out better-than-expected of 3.2% compared with forecast 2.2%.
According to the official release: "The increase in real GDP reflected increases in consumer spending, inventory investment, exports, government spending, and business investment that were partly offset by a decrease in housing investment. Imports, which are a subtraction in the calculation of GDP, decreased in the first quarter."
US Federal Funds Rate
During this week there are various macroeconomic data releases that will impact currency exchange rates. Moreover, there will be a Federal Funds Rate announcement.During Wednesday's trading session there will be two events to watch.
First will be the ISM Manufacturing PMI, which will be covered this week for one reason. To check whether this data release is significant enough to be on the economic calendars.
On the same day note that the most important event of the month will take place. At 18:00 GMT the US Federal Funds Rate and FOMC Statement will be published. The US Federal Reserve will reveal the future of the US Dollar.
On Thursday, the Bank of England announced their monetary policy data and information at 11:00 GMT. Moreover, the Governor of the bank will speak at 11:30 at a press conference.
On Friday, the US Employment data sets will be published at 12:30 GMT. This event is considered the second most important release for the USD. However, due to three data sets having individual impact on the USD the range of the volatility increase is wide during the data release.
Meanwhile, check out the previous data release covers and economic calendar analysis on the Dukascopy Webinars YouTube channel.
EUR/USD hourly chart's review
Yesterday, the EUR/USD exchange rate reached the psychological level at 1.1220. During today's morning, the rate was trading near the monthly PP at 1.1217.The currency pair could use support of the given monthly PP and maintain its growth. However, the pair has to surpass the weekly R1 at the 1.1239. If the given resistance does not hold, the pair could reach the psychological level at 1.1260. Otherwise, the pair could trade sideways.
From technical perspective, it is unlikely, that the rate could decline due to the support cluster formed by a combination of the 55-, 100– and 200-hour SMAs, as well the Fibo 38.20% and the weekly PP in the 1.1170/1.1200 range.
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 1.1280 and 1.1336.
Daily chart
On the Swiss Foreign Exchange, 69% of the total open position volume was in short positions.
Meanwhile, trader set up pending orders in the 100-pip range were almost neutral. Namely, 53% of all orders were set to sell.