The EUR/USD has highly increased its volatility, as the rate has traded in a range of more than fifty base points during the last 24 hours.
In general the rate made an attempt to approach the 1.1400 level and retreated back down to the support of a dominant ascending pattern near the 1.1340 level after failing to reach the 1.1400 level.
The European Single Currency appreciated against the US Dollar, following the US PPI and Core PPI release last Tuesday at 13:30 GMT. The EUR/USD exchange currency rate gained 5 pips or 0.05% during a minute, right after the release. The European Single Currency kept going upwards after the data release to continue trading at the 1.1440 area against the US Dollar.
The Bureau of Labor Statistics released US PPI data lower-than-expected of negative 0.2% compared with forecasted 0.01%. Note, that the US Core PPI was released at the same time with the US PPI.
The Bureau of Labor Statistics said in a note, "Lower energy prices sent the producer price index (PPI) down 0.2% in December. Prices for services ticked down 0.1%, but are up 2.8% over the past year—the strongest pace this expansion. The sharp drop in oil prices over the fourth quarter has pulled down energy input costs for a second straight month."
Quiet week for fundamentals
On Thursday, main attention of fundamental event traders will be on the ECB Rate Announcement at 12:45 GMT. The volatility on the EUR charts usually increases during the ECB Press Conference, which will start at 13:30 GMT.Meanwhile, oil traders will most likely catch a one percent move at 15:30 GMT. The data release has been providing moves of more than one percent during the last month and a half.
EUR/USD daily review
The rate stood at the lower trend line of a dominant pattern. Previously the pattern's line was located lower and was only touched on the daily chart. Dukascopy Analytics used the additional reference points on the hourly chart to adjust the pattern.The EUR/USD is expected to bounce off the support line and surge up to the resistance of the 55 and 100-hour simple moving average near the 1.1370 level.
Meanwhile, it is still possible that a fundamental event forces the EUR/USD into a decline. In that case the rate will fall down to the monthly pivot point at 1.1330.
Hourly Chart
On the daily chart the ascending pattern can be observed more clearly. You can see that the support line of the EUR/USD is based on three previous low levels that were touched during the end of 2018.
In accordance with the pattern the rate is expected to surge. Although, it will face a strong resistance level at the 1.1400 level, where three technical levels are located at.
In addition, note that the resistance of the 55-day SMA is holding below the 1.1400 level. It can be seen that it reversed the rate's surge on Wednesday.
Daily chart
Traders continued to be short on EUR/USD despite the volatility, as 55% of open positions were short on Thursday.
Meanwhile, trader pending orders in the 100-pip range were neutral again. They had become bearish on Wednesday.
In general, the lack of close by trade orders reveals that most of the open positions are long term. Moreover, as the positions did not change during the increased volatility, it signals that they do not have close by trailing stop losses.