The sudden decline was consistent with the German announcement that the country's government debt would reach 80% of GDP, which is the same level as in the aftermath of the financial crash.
Economic Calendar Analysis
Wednesday is a major day for other data releases. Throughout the whole day the Markit Institute is set to publish Manufacturing and Services Purchasing Managers Indices. The indices are the result of a major survey of firm representatives.
Expect PMIs from France, Germany, the Eurozone first from 7:15 to 08:00 GMT.
The French PMI could cause a move of 10.0 to 30.5 pips. The German data has been causing moves from 11.3 to 17.4 pips, and the Euro Zone PMIs cause moves from 9.6 to 14.9 base points.
On the same day, at 13:45 the US PMIs will be released. A move on the EUR/USD from 8.8 to 21.1 pips has occurred on the release in the last half year. The largest moves were spotted in the previous three months.
On Thursday, as accustomed, at 12:30 GMT, the US weekly Unemployment Claims could cause a move. The range for this release is wide. Namely, 6.3 to 48.9 pips.
The week will end with a possible minor move from the US Durable Goods Orders at 12:30 GMT. EUR/USD could move 11.1 to 18.3 pips.
Click on the link below to find out more about the data releases.
EUR/USD hourly chart's review
On Friday, the EUR/USD currency pair tested the resistance level—the monthly PP at 1.1867. During today's morning, the pair dropped to 1.1800.It is likely that some downside potential could prevail in the market, and the exchange rate could re-test the lower boundary of the medium-term descending channel circa 1.1730.
Meanwhile, note that the rate could gain support from the weekly and monthly S1s in the 1.1760 area and reverse north in the short term. In this case it is unlikely that the pair could exceed the given resistance level.
Hourly Chart
On the daily candle chart, the pair has been consolidating between the Fibonacci 61.80% retracement at 1.1707 and the 1.1955 level since the beginning of August.
In addition, note that the 1.1700 level was strengthened by the 55-day simple moving average.
Daily chart
Read More: Technical Analysis
Traders remain neutral
On Friday, on the Swiss Foreign Exchange 53% of all EUR/USD open position volume was in short positions.
On Monday, the sentiment was 52% short.
Meanwhile, trader set up pending orders in the 100-pip range around the pair were bullish, as 61% of orders were to buy.
The orders were 61% to sell on Friday.