The EUR/USD has declined, as the most likely scenario suggested yesterday. Namely, the support levels at 1.1420 has been reached.
Next target for a decline is the weekly S1 at the 1.1395 level. Although, note that the 1.1400 level might provide psychological support. Market participants tend to do deals near round levels of currency exchange rates.
The European Single Currency appreciated against the US Dollar, following the US FOMC Meeting Minutes release on Wednesday at 19:00 GMT.
The EUR/USD exchange currency rate gained 45 pips or 0.39% during a minute, right after the release. The European Single Currency continued trading at the 1.1480 area against the US Dollar.
The Federal Reserve releases US FOMC Meeting Minutes where fed officials provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.
"In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes," the statement said.
Nothing for EUR/USD
No fundamental macroeconomic data releases will influence the EUR/USD this week.Meanwhile, there are two data releases, which are set to increase volatility on other pairs and one might trade them.
The Bank of England rate announcement is scheduled to occur on Thursday. The rate announcement and the results of the central bank's monetary policy vote will be published at 12:00 GMT.
Another notable event during this week will be the Canadian Employment data release on Friday at 13:30 GMT.
Both of these events are scheduled to be covered by Dukascopy Analytics on our Dukascopy Webinars YouTube channel. The streams start ten minutes before the data release.
For more detailed info and a chance to ask questions watch the weekly calendar analysis by clicking on the link below.
EUR/USD hourly chart's review
During Monday's trading session, the rate passed through the support level of the monthly PP at 1.1435. On Tuesday morning, the European Single Currency was located at the 1.1413 mark.Most likely, the rate will trade sideways and stay near the weekly S1 at 1.1394 and the 200-hour simple moving average at 1.1422. This would occur, if the rate would consolidate its decline.
On the other hand, the rate could pass the 200-hour simple moving average's support and decline down to the 1.1395 level. At that level the weekly S1 pivot point is located at.
Hourly Chart
On the daily chart the lower trend line of a massive scale ascending pattern forced the rate into a surge last week.
In general, from the daily chart's perspective the pair is consolidating its short term gains. Afterwards it should resume its surge until it reaches the upper trend line of a large scale descending pattern, which can be best seen by zooming out.
It would do so by retreating to the levels near 1.1400. Note that the weekly S1 is supported by the 55-day simple moving average, which previously has shown that it can create short term moves that can last a couple of days.
In addition, take into account that the pair is being supported by the 100-day simple moving average. Meanwhile, the 200-day SMA should provide resistance in the future, as it is heading down near 1.1560.
Daily chart
On Monday, traders of the Swiss Foreign Exchange had massively oversold the EUR/USD in expectations of a decline. Namely, 71% of traders had open short positions for the pair.
By the middle of Tuesday's trading session 68% of positions were short.
Meanwhile, by looking at the pending orders in a 100-pip range above and below the current exchange rate, it can be seen that the sentiment is almost neutral.
52% of pending orders are to buy. Previously, sell orders slightly dominated.
In general, traders are profiting from the decline and some have even already closed positions by taking profits at the 200-hour SMA.