EUR/USD collapsed on the Turkish crisis that threatens to cause some damage also to euro-zone banks. Will it continue falling? The upcoming week features further fallout from this crisis and also all-important GDP figures. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD. Turkey is suffering from high inflation and no significant policy to tackle it. The American decision to impose sanctions on two Turkish ministers due to the imprisonment of an American pastor exacerbated the fall of the Turkish Lira. The problem turned from local to global when a report in the FT said the European Central Bank is concerned about the stability of three major European banks with exposure to Turkey. EUR/USD was already pressured by unimpressive German data and the trade tensions between the US and China which pushed the greenback higher. The Turkish crisis pushed it to new 2018 lows were cascading stop-loss points turned the fall into an avalanche. In the US, Core CPI came out at 2.4% y/y, better than expected, providing further fuel for the Fed to raise rates. [do action=”autoupdate” tag=”EURUSDUpdate”/]EUR/USD daily chart with support and resistance lines on it. Click to enlarge: German Prelim GDP: Tuesday, 6:00. While we have already received a preliminary estimate of the full euro-zone GDP, we still haven’t heard from the largest country and this happens now. Europe’s largest economy grew by a relatively disappointing pace of 0.3% q/q in the first quarter of the year after a robust 2017. A slightly higher growth rate of 0.4% is on the cards now. German Final CPI: Tuesday, 6:00. The initial inflation read Germany showed a monthly price increase of 0.3% in July. The final read is expected to confirm the initial number. French Final CPI: Tuesday, 6:45. France, the second-largest economy in the continent, saw a drop of 0.1% m/m in inflation. Also here, the final read for July is projected to confirm the initial read. GDP: Tuesday, 9:00. The second read of growth in the euro-zone is expected to confirm the initial estimate of 0.3% in Q2, which is somewhat slow. If the German number surprises, it could impact expectations as Germany carries a lot of weight. German ZEW Economic Sentiment: Tuesday, 9:00. This forward-looking survey of 300 analysts and investors disappointed with a significant drop to -24.7 points, deeper into negative territory, reflecting increased pessimism. A small improvement is on the cards to -20.1 points. Industrial Production: Tuesday, 9:00. The overall industrial output for the continent is published after the major countries have already released their numbers. Nevertheless, the figure tends to surprise. After an increase of 1.3% in May, a slide of 0.3% is on the cards for June. German WPI: Thursday, 6:00. The Wholesale Price Index provides an early insight at inflation in the pipeline. Prices at the wholesale level eventually reach the retail level. A rise of 0.5% is expected for July, the same as in June. Current Account: Friday, 8:00. Similar to the narrow trade balance figure, the euro-zone enjoys a broad current account surplus mostly thanks to German exports. A surplus of 23.2 billion euros is expected for June after 22.4 billion in May. CPI: Friday, 9:00. The final inflation estimate for June is projected to confirm the initial read: 2.1% on the headline and 1.1% on core CPI. The gap between the figures is mostly due to rising energy prices. The increase in core CPI from 1% to 1.1% is an encouraging sign for the ECB. * All times are GMT EUR/USD Technical Analysis Euro/dollar kicked off the week in the known ranges, rising to the 1.1624 resistance level mentioned last week. It then collapsed and hit a new 13-month low at 1.1387. Technical lines from top to bottom: 1.1845 was the high point in early June. 1.1790 capped the pair in mid-July 1.1750 is a low point recorded in mid-May. 1.1720 is a veteran line that worked in both directions, last seen in November. 1.1676 was a temporary low point in late May. 1.1625 provided support to the pair several times in June and July. It is followed by the mid-July trough of 1.1575. Below, 1.1508 is the previous 2018 low. 1.1450 capped the pair back in June 2017 and may play a role now. The new low of 1.1387 is a key downside level. Even lower, 1.1300 is a round number and it also held the pair down in June 2017. 1.1115 was a low point also in that period of time. The very round level of 1.10 is next. I remain bearish on EUR/USD While the pair may see a temporary correction after the sharp drop and the Turkish crisis may be resolved, monetary policy divergence is still the name of the game. Caution from the ECB meets a hawkish Fed and the trend remains to the downside. Our latest podcast is titled Brexit summer blues, trade troubles Follow us on Sticher or iTunes Further reading: GBP/USD forecast – Pound/dollar predictions USD/JPY forecast – analysis for dollar/yen AUD/USD forecast – the outlook for the Aussie dollar. USD/CAD forecast – Canadian dollar predictions Forex weekly forecast – Outlook for the major events of the week. Safe trading! Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam EUR/USD ForecastMajors share Read Next AUD/USD Forecast Aug. 13-17 – Lost uptrend support, jobs in focus Yohay Elam 3 years EUR/USD collapsed on the Turkish crisis that threatens to cause some damage also to euro-zone banks. Will it continue falling? The upcoming week features further fallout from this crisis and also all-important GDP figures. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD. Turkey is suffering from high inflation and no significant policy to tackle it. The American decision to impose sanctions on two Turkish ministers due to the imprisonment of an American pastor exacerbated the fall of the Turkish Lira. 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