On Monday, the EUR/USD was testing the support of the lower trend line of a dominant ascending pattern.
The trend line has to be watched to see, what will be the future of the pair. In general, it can either decline below the support and continued lower or rebound to resume its surge upwards.
The European Single Currency appreciated against the US Dollar, following the US FOMC Meeting Minutes release the previous 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.
Week of inflation and retail sales data
This week will be busy for macroeconomic data releases. With the exception of Tuesday, on each day there is a notable data release.However, take into account that on Tuesday the heads of Bank of England and the US Federal Reserve will speak publicly. UK's Governor Carney will speak at 13:00 GMT and the head of the Federal Reserve Jerome Powell is set to speak at 17:45 GMT.
On Wednesday, at 09:30 GMT the UK CPI will be released. Later on at 13:30 GMT the US CPI and Core CPI will be released.
On Thursday, at 13:30 GMT the US Retail Sales and Core Retail Sales data will be published. In addition, at the same time the US Producers Price Index will be released.
The week will be closed by a UK data release. Namely, the UK Retail Sales data will be published at 09:30 GMT.
All 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.
EUR/USD hourly chart's review
On Monday morning the EUR/USD was testing the support of a medium scale ascending pattern. The forecasts surround this level.Namely, in the first and main scenario the rate is expected to bounce off from the support line and surge up to the resistance of the 55-hour simple moving average. By the middle of Monday's trading the SMA was moving lower near the 1.1340 mark.
On the other hand, the pair might break the support of the pattern. Afterwards, it would face the support of a monthly pivot point at 1.1300.
Hourly Chart
The large scale situation can be observed better on the daily candle chart.
In the second half of January the trend line forced the currency exchange rate into the surge, which pierced the 1.1500 level.
It is expected that it will hold its ground and force the rate into a rebound. Although, always prepare for more than one scenario.
Namely, if the pair passes the support of the trend line it could fall freely as low as 1.1150, as there are no other support levels on the daily chart besides the weekly and monthly pivot points.
Daily chart
Throughout last week traders had become from 70% short to 64% short by Friday. On Monday, the trend continued.
By the middle of Monday's trading session 61% of trader open positions were short.
Meanwhile, by looking at the pending orders in a 100-pip range above and below the current exchange rate one can see where the rate might move in the near future.
58% of pending orders are to buy.
In general, a majority of traders are still shorting the EUR/USD but have their stop losses and take profits close by.