Despite the Federal Reserve cutting interest rates, the EUR/USD has plummeted down. Namely, the USD gained value instead of the in theory expected decline.
From a technical analysis perspective on Thursday the currency exchange rate was bound to test the support of the weekly S2 at 1.1029.
US ISM Manufacturing PMI
On Thursday, the ISM Manufacturing PMI will be published at 14:00 GMT. This event has caused moves from 13.1 to 20.9 base points.
On Friday, the US employment data will be published. It will consist of the US Average Hourly Earnings, Non-Farm Employment Change and the official Unemployment Rate. This release has caused moves from 13.3 to 48.0 base points.
EUR/USD hourly chart's review
On Thursday morning, the EUR/USD was gradually continuing its decline, which was expected to reach the support of the weekly S2 at 1.1029.If the rate passes the support of the weekly pivot point, the rate should decline down to the monthly S1 at 1.0967.
On the other hand, if the weekly pivot point holds the rate would rebound back to the 1.1080 level.
Although, note that there will still be moves occurring during the day associated with the Federal Reserve, as the whole world analyses the information revealed in the press conference by the FOMC.
Hourly Chart
On the daily candle chart it can be observed that the EUR/USD dropped down to the support of a large scale descending channel pattern.
This trend line is expected to strengthen the support of the weekly S2.
Daily chart
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Traders profit
Since Friday, 65% of open EUR/USD position volume on the Swiss Foreign Exchange has been in short positions.
On Thursday, 62% of volume was in shorts. Namely, 3% had taken profits during the drop and the rest stuck to their positions.
Meanwhile, trader set up pending orders in 100-pip range around the pair were bearish, as 56% of all orders were set to sell and 44% were to buy.