EUR/USD rebounded and had its best week of the year, gaining 1.16%. There are four events on the calendar this week. Here is an outlook at the highlights and an updated technical analysis for EUR/USD.
The Eurozone Sentix Investor index accelerated to 13.1 in April, up sharply from 5.0. The reading easily beat the forecast of 6.8. German and eurozone Service PMI were a bit higher than expected, with readings of 51.5 and 49.6, respectively. For Germany, this was the first time that services showed growth in six months – the 50 line separates growth from contraction. German manufacturing numbers were mixed – Factory Orders gained 1.2%, but Industrial Production fell by 1.6%.
EUR/USD daily chart with support and resistance lines on it. Click to enlarge:
- Retail Sales: Monday, 9:00. Retail Sales started the year on a sour note, with a reading of -5.9%. Analysts expect a rebound in February, with an estimate of 1.3%.
- ZEW Economic Sentiment: Tuesday, 9:00. The indicator continues to accelerate and show increased confidence, rising to 74.0 in March. This was up from 69.6, and the forecast for April stands at 77.2.
- Industrial Production: Wednesday, 9:00. Industrial Production rose 0.8% in January but is projected to fall by 1.2% in February.
- Eurozone Inflation Report: Friday, 9:00. Headline inflation rose to 1.3% in February, up from 0.9% beforehand. Core CPI slipped from 1.1% to 0.9%. The upcoming releases are expected to confirm the initial releases.
Technical lines from top to bottom:
We start with resistance at 1.2258 (mentioned last week).
1.2089 has been a strong resistance line since the start of March.
1.1944 is next.
1.1849 has switched to a support role after strong gains by the euro last week.
1.1754 has provided support since November 2020 and was tested at the end of March.
1.1585 is the final support level for now.
I am neutral on EUR/USD
The US economy continues to gather steam, while the eurozone continues to grapple with Covid lockdowns and a sluggish vaccine rollout. The eurozone is expected to show growth in 2021, but this will take some time, and the euro could face some headwinds in the meantime.
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