From a theoretical perspective, it is likely that some upside potential could prevail in the market.
Economic Calendar Analysis
On Friday, both Canada and the US are set to release their monthly employment data at 12:30 GMT. Depending on the currencies that one trades, one needs to look at different data tables, as reactions to the event vary.
Next week there are couple events that could impact the EUR/USD pair.
On Thursday, at 11:45 GMT, the European Central Bank would publish its Main Refinancing Rate, which most likely would remain at a 0.00%. However, despite the rate remaining unchanged, since March, the rate has moved from 16.9 to 82.6 pips on the announcement.
On the same day, at 12:30 GMT a group of minor US data sets is scheduled to be published. The set will consist of US Producers Price Index, Core Price Index and Unemployment claims. In most cases these data releases cause insignificant moves.
The week will end with the publication of the US Consumer Price Index and Core Consumer Price Index changes. This event had been insignificant and did not cause increases of volatility since April. However, in August, there were notable moves on all USD pairs.
Click on the link below to find out more about the data releases.
EUR/USD hourly chart's review
On Thursday, the EUR/USD currency pair reversed north from the lower line of the medium-term ascending channel. During today's morning, the pair was testing the resistance formed by the weekly and monthly PPs, as well the 200-hour SMAs at 1.1860.From a theoretical point of view, it is likely that some upside potential could prevail in the market in the short run, and the exchange rate could target the 1.1920/1.1940 range.
However, if the given resistance holds, it is likely that the Euro could trade sideways against the US Dollar within the following trading session.
Hourly Chart
On the daily candle chart, if the rate continued to decline, it could look for support in the combination of the monthly S1 at 1.1767 and the lower trend line of a large scale channel up pattern.
Daily chart
Read More: Technical Analysis
Traders take profit from decline
On Thursday, on the Swiss Foreign Exchange 61% of all EUR/USD open position volume was in short positions.
On Friday, the sentiment was 62% short. It is assumed that short term short traders have been taking profits.
Meanwhile, trader set up pending orders in the 100-pip range around the pair were set to sell in 53% of all cases.