On Monday, the EUR/USD was facing the resistance of a technical level cluster near 1.1175. Namely, the 100-hour SMA, weekly PP and a 61.80% Fibonacci retracement level.
In general, the rate was expected to fail at breaking above this level, as it had no technical support that could push it higher.
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 this week
During this week there are various macroeconomic data releases that will impact currency exchange rates. Moreover, there will be a Federal Funds Rate announcement.On Tuesday, the Canadian GDP is expected to cause a significant impact on the CAD pairs at 12:30 GMT.
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 once more show that this data release is not significant enough to be on economic calendars, as it causes no increases of volatility.
On the other hand, the opposite might be revealed during the analysis.
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
At the end of the previous week, the EUR/USD currency pair tried to surpass the 1.1160 level.During Monday's morning, the pair was squeezed by the 55– and 100-hour moving averages, located at 1.1145 and 1.1173 respectively. Thus, it is likely, that the exchange rate could trade sideways in the short term.
However, if the given 55-hour SMA does not hold, it is expected, that some downside potential prevails in the market. The rate could re-test the lower boundary of the medium-term descending channel located circa 1.1115.
Hourly Chart
On the daily candle chart, the rate has additional support provided by the lower trend line of a long term descending channel pattern near 1.1100.
Although, the rate should push through the trend line, as the most dominant trend is aimed down. However, at the time of writing it was not expected to occur until the middle of summer.
Daily chart
On the Swiss Foreign Exchange, 68% of the total open position volume was in short positions.
Meanwhile, trader set up pending orders in the 100-pip range were neutral. Namely, 52% of all orders were set to buy, on Monday.