Browsing: EUR/USD Forecast

The Euro finished an exciting week almost unchanged. The upcoming week has inflation figures as well as other indicators. Here’s an outlook for the European events and an updated technical analysis for EUR/USD.

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

EUR USD forecast

Note that also Euro crosses had an exciting week. In particular, EUR/JPY dropped below a support line and then recovered, moving in a range of 440 pips during the week. OK, let’s start:

  1. German Final CPI: Published on Tuesday at 6:00 GMT. The first inflation figure comes from Germany early in the week. Prices have returned to normal after moving like a see-saw. The rise of 0.5% that was reported in the initial release will probably be confirmed now.
  2. French CPI: Published on Tuesday at 6:45 GMT. Europe’s second largest economy releases its consumer price index shortly after Germany. Prices are predicted to rise by 0.5%, less than last month’s 0.6% rise. The release of both figures almost together will is likely to move the Euro.
  3. Industrial Production: Published on Wednesday at 9:00 GMT. Although Germany and France already released their figures, this release still tends to surprise and move the Euro. Last month’s rise of 1.7% was a reflection of the previous month’s drop. A more modest rise of 0.4% is expected this time.
  4. ECB Monthly Bulletin: Published on Thursday at 8:00 GMT. A week after the rate decision, this release exposes the figures that stood before the bankers’ eyes before making their decision. There could be hints about future policy as well.
  5. Trade Balance: Published on Thursday at 9:00 GMT. The European trade balance wasn’t published last month due to technical difficulties. So, we’ll get two releases at once – for January and February. Both are expected to show a smaller surplus than the last release for December, that stood on 7 billion euros.
  6. CPI: Published on Friday at 9:00 GMT. The final inflation release for the week is for the whole continent – Europe’s prices are rising quite slowly. The annually adjusted rise of 1.5% will probably confirmed. Core CPI is expected to be revised from 0.8% to 0.9%. Only a serious rise will pave the way for a rate hike.

EUR/USD Technical Analysis

The Euro had a bad start to the week – it began by dropping under the previous week’s low of 1.3380 and got close to 1.3267 – the year to date low. It then made a comeback, and managed to close at 1.3497.

Most of the lines haven’t changed since last week’s outlook. The current range is between 1.3380 and 1.36, which was the peak of the previous week.

Above 1.36, the next line of resistance is strong – 1.3850 proved as a stronghold – it sent the Euro down after a failed attempt to break this line. Even higher, 1.40 is a significant line, followed by 1.42 – they were support lines a few months ago.

Looking down, 1.3267 now has a more important position, after holding EUR/USD from dropping lower. A break below this line will lead the way to 1.3080, which was the area where the pair began the upwards move last year.

I remain neutral on EUR/USD.

Fear sent it down and hope helped it recover. All in all, the Greek news continue to dominate the pair’s trading – trading which has become wild, yet indecisive.

This pair receives many interesting reviews on the web. Here are my favorites:

  • James Chen talks discusses the bearish breakdowns within the downtrend.
  • Casey Stubbs brings his recent results on the pair, using 1 hour charts.
  • DailyFX says that the Euro troubles may reach a boiling point as Greece plans debt auction.
  • The Geek Knows reviews the week and looks forward.

Further reading on Forex Crunch:

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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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