Browsing: EUR/USD Forecast

EUR/USD posted slight losses last week. There are only three events in the upcoming week. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.

There were no surprises from PMI reports, as manufacturing remained weak, while services continued to show expansion. German manufacturing PMI dropped to 44.5 in March, shy of the estimate of 45.2 points. The all-eurozone manufacturing PMI posted a decline of 47.8, missing the forecast of 48.1 points. The services sector, which is more reflective of domestic demand, is in better shape. German services PMI improved to 55.6, while the eurozone indicator showed slight expansion, with a reading of 52.5 points.

There was positive news from the ZEW economic sentiment survey, a key gauge of investor confidence. The indicator has been mired in negative territory for the past 12 months, and finally climbed into positive territory in April. The score of 3.1 points to slight optimism on the part of institutional investors and analysts. The eurozone indicator showed a similar trend, climbing to 4.5 points, its first gain since May.

U.S. numbers enjoyed a solid week. Consumer spending rebounded in March, after posting declines in February. Retail sales jumped 1.6%, above the estimate of 0.9%. Core retail sales gained 1.2%, beating the forecast of 0.7%. As well, unemployment claims sparkled with a reading of 199 thousand. This was only the second reading below the 200-K level in 2019.

EUR/USD daily chart with support and resistance lines on it. Click to enlarge:

https://www.tradingview.com/x/K0uHctzC/

  1. Consumer Confidence: Tuesday, 14:00. With the eurozone economy gripped in a slowdown, it’s no surprise that consumer confidence remains mired in negative territory. The indicator has posted twos straight readings of -7, and no change is expected in the April release.
  2. German Ifo Business Climate: Wednesday, 8:00. This key indicator improved to 99.6 in March, above expectations. The upward trend is projected to continue in April, with an estimate of 99.9 points.
  3. Spanish Unemployment Rate: Thursday, 7:00. The fourth-largest economy in the eurozone has seen the unemployment rate drop. The rate edged down to 14.5% in Q3, its lowest level since Q3 of 2008. No change is expected in the Q1 release.
  • * All times are GMT

Technical lines from top to bottom:

1.1620 has held in resistance since the start of October.

1.1570 is next.

1.1515 was a high point at the end of January. 1.1435 was a low point at the beginning of February.

1.1390 was a stepping stone on the way up in late January and capped EUR/USD earlier. This is followed by 1.1345.

1.1290 (mentioned last week) remained relevant during the week.

1.1270 was a double-bottom in December 2018

1.1215 is next. This is followed by 1.1119.

1.1025 was a cap back in May 2017.

1.0950 is the final support level for now.

I am bearish on EUR/USD

The U.S economy remains much stronger than that of the eurozone, which continues to be gripped by a slowdown. EUR/USD declined two percent in Q1, and with the ECB content at maintaining rates at a flat 0.00%, investors aren’t likely to snap up euros anytime soon.

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EUR/USD Forecast, Technical Analysis, Outlook ► preview of the major events that move Euro/Dollar during the week. Here are some general data. Scroll down for the latest EUR/USD forecast.

EUR/USD characteristics

Euro/dollar is the world’s most popular currency pair for both retail and institutional traders. 19 European countries that vary quite a bit from each other share the single currency. The key countries are Germany, France, Italy and Spain. The US dollar is the reserve currency of the world.

A wide trade surplus, originating mostly from German exports, means that funds are flowing into the euro area. When markets are calm, this influx pushes the common currency higher. However, the eurozone has its share of economic and political issues and speculation takes its toll.

The euro debt crisis engulfed Greece, Portugal, Ireland, Italy, and Spain. While the worst may be behind us, it is always looming. The leadership of the European Central Bank and President Mario Draghi helped stabilize and even save the euro. His “whatever it takes” speech in July 2012″ was a turning point. The diverse countries are linked by a monetary union but not a fiscal one, and this remains the Achilles heel.

EUR//USD trading is often choppy, especially when it is confined to narrow ranges. When the pair is in trend, past technical lines, even those from 2003, are respected quite nicely. €/$ has a “good memory”.

EUR/USD recent moves

The euro-zone economies are growing at a robust pace in 2017. Unemployment is falling and even core inflation is finally rising albeit temporarily All this has led to optimism that sent the euro higher.

The ECB will halve bond-buys to 30 billion euros from January 2018. However, it left the door open to extending the QE program beyond September, and this hurt the euro. A weaker euro makes exports more attractive and pushes imported inflation higher. Draghi is happy with growth but worried about inflation.

The political uncertainty in Germany is becoming an issue after inconclusive elections in September. A fresh round of elections joins the crisis in Catalonia and the political instability in Italy.

In America, hopes for fiscal stimulus faded early in the year, but are now on the rise again, with Trump’s tax plan. The Federal Reserve has maintained its plan for three rates hikes in 2017 despite lower US inflation.

Latest weekly EUR/USD forecast

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