The surge of the Euro against the US Dollar is reacting to the last day of the year phenomena with a retracement to the 1.1038/1.1045 zone that is acting as support. Meanwhile, 68% of traders were shorting the pair and could have benefited.
Economic Calendar Analysis
At the start of 2024, notable events start on Wednesday. At 15:00 GMT, watch the Institute for Supply Management Manufacturing Purchasing Managers Index survey results and the JOLTS Job Openings number. Note that the two releases could cause a major impact, if both shows either better or worse than expected data.
On the same day, some impact could be created by the publication of the Federal Reserve Open Market Committee Meeting Minutes publication. The Meeting Minutes are a protocol of the US monetary policy maker's last meeting. It can reveal additional information on future US base interest rate policy.
On Thursday, the US ADP Non-Farm Employment Change is capable of impacting the markets. The Automatic Data Processing released number usually is a good indicator of what the US government data will show, as it occurs prior to the official publication of employment numbers. The event is scheduled for 13:15 GMT.
On Friday, the US monthly employment data sets will be published. The event is scheduled for 13:30 GMT.
They are bound to impact the financial markets via the value of the US Dollar. Namely, good data reveals that inflation might return and the Fed would have to keep rates high or even cut. This would cause a surge of the Dollar. On the other hand, bad data would weaken the USD, as the Fed can cut rates.
EUR/USD hourly chart analysis
A passing below 1.1038/1.1045 could look for support in the 1.1000 mark, the 200-day simple moving average, the 1.1008/1.1013 zone and the weekly simple pivot point at 1.1020. Below the cluster of support levels, note the 1.0930/1.0935 range.On the other hand, a recovery of the Euro against the US Dollar is expected to be slowed down by the 1.1100 level and the 50-hour simple moving average. Higher above, the 1.1120/1.1140 range is set to act as resistance.
Hourly Chart
EUR/USD daily chart's review
On the daily candle chart, the rate has broken above the 1.1070/1.1100 high level range. The zone could turn into support, before the pair aims at the 1.1250 level.Daily chart
Read More: Technical Analysis
Traders remain short
On Wednesday, traders were 68% short, as more expected a decline. Meanwhile, pending orders in the 100-pip range around the pair were 54% to sell.
On Thursday, the positions were 69% short and orders were 51% to sell.
During the last session of 2023, the positions were 68% short and orders were 52% to buy the Euro against the US Dollar.