The EUR/USD has declined, as it was previously described in the most likely scenario. Namely, the rate was pushed down below the 1.1300 level.
Although, on Wednesday morning the currency exchange rate had not reached the technical support of 1.1240, which was the target of the decline.
The European Single Currency depreciated against the US Dollar, following the German Flash Manufacturing PMI release on Friday at 08:30 GMT. The EUR/USD exchange currency rate lost 83 pips or 0.73%, right after the release. The European Single Currency continued trading at the 1.1300 area against the US Dollar.
The Markit released German Flash Manufacturing PMI data that came out lower-than-expected of 44.7, compared to forecast 48. Note, that the German Flash Services PMI was released at the same time with the Manufacturing PMI.
Key comments from Phil Smith, Principal Economist at IHS Markit: "The downturn in Germany's manufacturing sector has become more entrenched, with March's flash data showing accelerated declines in output, new orders and exports. Uncertainty towards Brexit and US-China trade relations, a slowdown in the car industry and generally softer global demand all continue to weigh heavily on the performance of the manufacturing sector, which is now registering the steepest rate of contraction since 2012."
Last week of the month is quiet
This is the last week of March and due to that reason it is expected to be quiet for macroeconomic fundamental data releases. However, there are a couple of notable events worth watching.On Thursday, the US Final GDP data will be published at 12:30 GMT. The event might cause moves on various currency exchange rates from ten to twenty base points.
On Friday, there will be two releases. First will be the UK Current Account publication at 09:30 GMT. This event is expected to cause a small reaction because still most attention of fundamental traders is on the Brexit events not macroeconomic data.
That is because no historical data can be used for forecasting a currency strength in a situation where the base of the underlying economy is about to change so drastically.
Afterwards, on the same day, the top release of the week will occur. At 12:30 GMT the Canadian GDP will be published. The Canadian events are the only ones, which have constantly created exchange rate adjustments of more than 40 pips.
For more information watch the week's calendar review on YouTube by clicking the link below.
EUR/USD hourly chart's review
The EUR/USD has declined and touched the support of the 1.1250 level, which has forced the rate into trading sideways on Wednesday morning.In general, it is expected that after a period of sideways trading the rate will resume its decline and reach the pivot point levels at 1.1240 and 1.1234.
If these levels get passed, the rate will aim to reach down to 1.1200. At that level a 61.80% Fibonacci retracement level is located.
Hourly Chart
On the daily chart it can be seen that the lower trend line of an ascending pattern was broken, as it was described previously.
The support was broken because the pattern is junior to a larger scale channel down pattern. Namely, the medium term surge has ended and the larger decline continues.
Daily chart
On the Swiss Foreign Exchange the total open position volume is mostly short. Namely, 72% of volume was shorting the EUR/USD.
Meanwhile, trader set up pending orders in the 100-pip range were almost neutral. Namely, 53% of pending orders were set to buy.
Despite the rate recovering on Monday, traders have remained short on the pair.