The EUR/USD started the week by trading sideways near the 1.0800 level. However, the consolidation was about to end, as the rate was approached by the resistance of the 55-hour simple moving average near 1.0840.
In theory, the SMA should push the rate down. In the case of a decline, the pair could look for support in the 1.07500 mark.
US Employment data
The Euro depreciated against the US Dollar, following the US Employment data set release on Friday at 12:30 GMT. The EUR/USD exchange currency rate lost 28 pips or 0.26% after the release. The Euro continued trading at the 1.0790 level against the Greenback after the release.
The Bureau of Labor Statistics released the US Unemployment Rate data, which came out worse-than-expected of 4.4% compared with the forecast of 3.8%.
According to the official release: "In March, the unemployment rate increased by 0.9 percentage point to 4.4 percent. This is the largest over-the-month increase in the rate since January 1975, when the increase was also 0.9 percentage point. The number of unemployed persons rose by 1.4 million to 7.1 million in March. The sharp increases in these measures reflect the effects of the coronavirus and efforts to contain it."
Economic Calendar Analysis
As it occurred during the last week, due to the fundamental changes in the markets, Dukascopy Analytics suggests to note the scheduled macroeconomic events, but avoid using historical data for guidance.
Namely, the whole world changes the money supply by announcing monetary stimulus and government expense increases. In other words, the central banks are creating more money and giving it to governments to stop the effects of the coronavirus. In effect, each announcement causes a fall of the currency that it affects.
However, click on the link and take a look at the last reactions to various events in March. Even already ignored events like Producers Price Index and Consumer Price Index caused notable reactions above 20 pips. Previously, the release of these data sets did not cause an increase of exchange rate volatility.
EUR/USD hourly chart's review
On Friday, the EUR/USD currency pair consolidated in the 1.0800 area. During today's morning, the pair maintained its consolidation.Given that the exchange rate is pressured by the 55-hour SMA near 1.0840, it is likely that some downside potential could prevail in the market. In this case the rate could target the weekly S1 at 1.0667.
However, if the currency pair fails to surpass the 1.0750 level, it is likely that the Euro could continue to consolidate against the US Dollar in the short term.
Also, it is unlikely that bulls could prevail in the market, and the pair could exceed the resistance cluster formed by the 100– and 200-hour SMAs, as well the weekly PP in the 1.0905/1.0945 area.
Hourly Chart
On the daily candle chart, EUR/USD has begun a decline, which was expected. It was expected because at the start of March the rate plummeted too sharply. Recently, it retraced back up to the daily simple moving averages and removed the oversold pressure, which allowed the pair to continue to move lower.
Daily chart
By the middle of Friday's GMT trading hours, 70% of open EUR/USD position volume on the Swiss Foreign Exchange was in short positions.
The sentiment had remained almost unchanged since March 20. Traders remained short despite the recovery of the EUR/USD that has been occurring since that day.
On Monday, it changed, as 74% of trader open position volume was in short positions.