EUR/USD dropped slightly last week, marking a third successive losing week. The pair touched a low of 1.1704, its lowest level since November 2020. There are four events on the calendar this week. Here is an outlook at the highlights and an updated technical analysis for EUR/USD.
German CPI dipped to 0.5% in March, matching the forecast. This was down from 0.7% a month earlier. Eurozone CPI slowed slightly in March. Headline inflation slowed from 1.4% to 1.3%, while Core CPI dropped from 1.1% to 0.9%. German Retail Sales rebounded after two straight declines, with a gain of 1.2%. Still, this figure fell short of the forecast of 2.0%. Manufacturing remains a bright spot, with PMIs showing growth throughout the eurozone with readings above the 50-level. Germany looked very strong, with a reading of 66.6.
- Sentix Investor Confidence: Tuesday, 8:30. After months of mostly negative readings, Investor Confidence improved to 5.0 in March. The upturn is expected to continue, with a forecast of 6.8 for April.
- Services PMIs: Wednesday, 7:15 in Spain, 7:45 in Italy, 7:50 in France, 7:55 in Germany, 8:00 in the whole eurozone. Services PMIs are expected to remain below 50, which indicates contraction, in Spain, Italy, France, and the eurozone. Germany’s PMI is projected to nose above the neutral 50-level, at 50.8.
- German Factory Orders: Thursday, 6:00. Factory Orders improved to 1.4% in January, up from -1.9% beforehand. The estimate for February stands at 1.3%.
- French Industrial Production: Friday, 6:45. Industrial Production in the eurozone’s second-largest economy is expected to slow to 0.6%, down from 3.3%.
Technical lines from top to bottom:
1.2089 has been a strong resistance line since the start of March.
1.1936 is next.
1.1846 switched to resistance in mid-March, when the euro began a sustained slide.
1.1709 (mentioned last week) is the first line of support.
1.1538 is a 50% Retracement From the 52 Week High/Low. It is the final support level for now.
I remain bearish on EUR/USD
The US economy continues to gather steam, with the sharp NFP reading on Friday the latest piece of good news. The eurozone remains mired in Covid lockdowns and the vaccine rollout has been sluggish.
- EUR/USD forecast – for everything related to the euro.
- USD/JPY forecast – projections for dollar/yen
- AUD/USD forecast – predictions for the Aussie dollar.
- USD/CAD forecast – Canadian dollar analysis
- Forex weekly forecast – Outlook for the major events of the week.