EUR/USD increases volatility on ISM release

Note: This section contains information in English only.
Source: Dukascopy Bank SA

The rate traded near the support levels at 1.0880, as expected, until a fundamental event caused a surge.

On Wednesday morning, the EUR/USD had bounced off the resistance of 1.0940 and was heading back to the mentioned support level of 1.0880.

US ISM Manufacturing PMI

The European Common Currency appreciated against the US Dollar, following the US ISM Manufacturing PMI survey data release on Tuesday at 14:00 GMT. The EUR/USD exchange currency rate gained 24 pips or 0.22% right after the release. The Euro continued trading at the 1.0915 level against the Greenback.

The Institute for Supply Management released the US ISM Manufacturing PMI survey data results, which came out worse-than-expected of 47.8 compared to the forecast of 50.4.

The Chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee Timothy R. Fiore commented: "Global trade remains the most significant issue, as demonstrated by the contraction in new export orders that began in July 2019. Overall, sentiment this month remains cautious regarding near-term growth."



US Employment Data week



On Wednesday, the ADP Non-Farm Employment Change is set to be published at 12:15 GMT. This release has lost its significance during the last year, as it has caused moves from 5.3 to 11.5 pips since October 2018.

A move below ten pips during the time-frame that Dukascopy Analytics measure to compare data releases occurs without any events. It is normal volatility.

On Thursday, at 14:00 GMT the ISM Non-Manufacturing PMI is scheduled to be published. This release has caused rate adjustments on the EUR/USD from 7.5 to 18.6 pips since September 2018.

The week will end with the biggest event of the month in the US, the employment data publication, on Friday at 12:30 GMT. The release will consist of three data sets being published. The Unemployment Rate, Non-Farm Employment Change and the Average Hourly Earnings.

The Average Hourly Earnings is the top number to watch. It is closely followed in importance by the Non-Farm Employment change. Meanwhile, the Unemployment Rate can be ignored by financial traders.

The event has caused moves from 13.3 to 48 pips on the EUR/USD since May 2019.

All of the historical reaction data tables to all notable data releases have been published in a separate publication. To see the publication, click on the link below.

EUR/USD hourly chart's review

The rate bounced off the resistance provided by the 1.0940 level during the morning hours of Wednesday's London trading. Following the bounce off, the rate declined below the hourly simple moving averages.

The rate was set to reach the support levels that start from 1.0890 and last to 1.0880. Namely, the first support level of the simple weekly pivot points was located at 1.0890, a 23.60% Fibonacci retracement level was at 1.0889 and the 1.0880 level provided psychological support on its own.

If the support levels get passed, the rate would have no technical support as low as 1.0837. On the other hand, EUR/USD might fluctuate sideways above the support until the hourly simple moving averages push it down.

Hourly Chart



On the daily candle chart, the rate continues its decline in the large channel down pattern.

Meanwhile, the daily simple moving averages have been left behind above the 1.1070 level. It indicates that the rate is oversold and it could trade sideways.

Sideways trading in the borders of the channel down pattern could occur until even October 21, as on that date the upper trend line of the pattern would reach the 1.0955 level.

Daily chart


Traders short the pair

Since Tuesday morning, 60% of open EUR/USD position volume on the Swiss Foreign Exchange was in short positions.

Meanwhile, pending trade orders were neutral, as 51% of orders in the 100-pip range were set to sell and 49% were to buy.

Previously, the orders were 64% to buy.

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