EUR/USD had a more moderate week, ending on lower ground. Will it continue falling or is it only a correction? A speech by Draghi and inflation figures are in the limelight. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD. Both the IFO and ZEW German business surveys disappointed and so did euro-zone PMIs. The forward-looking figures still point to growth though. In the US, the FOMC Meeting Minutes showed a relatively hawkish stance, boosting the US dollar and setting the tone for the week. The greenback’s recovery continued, but the moves somewhat cautious. [do action=”autoupdate” tag=”EURUSDUpdate”/]EUR/USD daily chart with support and resistance lines on it. Click to enlarge: Mario Draghi testifies Monday, 14:00. The President of the European Central Bank appears before the European Parliament and is expected to speak about the latest economic developments. This event comes well before the next ECB meeting, allowing Draghi to hold his cards less close to the chest. The ECB is expected to announce the next steps in its QE program later in the year. Spanish Flash CPI: Tuesday, 8:00. Spain, the fourth-largest economy in the euro-zone, publishes its inflation data early. After a modest rise of 0.6% y/y in January, the preliminary number for February is expected to bounce back to 0.9%. Monetary data: Tuesday, 9:00. M3 Money Supply increased by 4.6% in December. The figure, representing money in circulation, is expected to show a rise of the same scale this time. Private loans are predicted to rise by 2.9% after 2.8% this time. The ECB monitors these figures. Jens Weidmann talks: Tuesday, 10:00. The President of the German central bank, the Bundesbank, is currently seen as the leading candidate to replace Mario Draghi at the helm as ECB President. Weidmann speaks at the publication of the Bundesbank’s annual report. German CPI: Tuesday: the German states publish the data throughout the morning, with the all-German number at 13:00. Prices dropped by 0.7% m/m back in January, slightly worse than expected. An increase of 0.5% is on the cards now. German GfK Consumer Climate: Wednesday, 7:00 According to the 2000-strong survey, German consumer confidence is on the rise. It surprised by reaching a score of 11 points in January, better than had been expected. A small drop to 10.8 points is on the cards. French Consumer Spending: Wednesday, 7:45. Consumers at the euro-zone’s second-largest economy squeezed their spending in December, with a drop of 1.2%. A bounce back is on the cards now, with +0.5%. Note that France also released an update on GDP at the same time, but changes are rare. French Prelim CPI: Wednesday, 7:45. Prices dropped by 0.1% in January, a more modest fall than had been expected. This time, the preliminary release for February is expected to show a small rise of 0.3%. French CPI will serve as a last hint towards the all-European measure. German Unemployment Change: Wednesday, 8:55. Germany’s labor market is thriving and the number of the jobless is falling at a rapid clip. After a drop of 25K in December, another slide of 17K is on the cards now. Euro-zone inflation: Wednesday, 10:00. The final figures for January showed that headline inflation slipped to 1.3% y/y in January. Another drop is on the cards now, to 1.2%. Core inflation is projected to remain steady at 1% also here, in the first release for February. Any deviation from these numbers could shake the euro. The ECB’s single needle in the compass is inflation. Manufacturing PMIs: Thursday: 8:15 for Spain, 8:45 for Italy, final French figures at 8:50, final German at 8:55 and the final euro-zone numbers at 9:00. Markit’s purchasing managers’ index showed a score of 55.2 points in January for Spain’s manufacturing sector, above the 50-point threshold that separates growth from contraction. A score of 54.8 is on the cards for January. Italy, the third-largest economy, is predicted to see a drop from the highs of 59 to 57.9 points. According to the flash figure for France, the PMI stood at 56.1 points in February. Germany had 60.3 and the euro-zone had 58.5 points. The final read is expected to confirm the initial reads. Unemployment Rate: Thursday, 10:00. The jobless rate has been falling quite consistently in the euro-zone since the peak in 2013. After 8.7% in December, a level of 8.6% is on the cards for January. German Retail Sales: Friday, 7:00. A significant drop of 1.9% was seen in German consumer spending in December, just around Christmas. A bounce-back of 0.9% is on the cards now. German Import Prices: Friday, 7:00. Prices of imported goods, most notably energy, impact inflation. A rise of 0.3% was seen in December, and 0.4% is on the cards now. Spanish Unemployment Change: Friday, 8:00. Spain still suffers from a high unemployment rate and its early updates provide a good insight on the broader picture. A big rise of 63.7K was seen in December. Now, a drop of 7.2K is on the cards. PPI: Friday, 10:00. Producer prices rose by 0.2% in December, slightly below expectations. Factory gate prices are now projected to increase by 0.4%. * All times are GMT EUR/USD Technical Analysis Euro/dollar started off the week holding onto the 1.2340 level mentioned last week. It then dropped to lower ground, ending the week below this line. Technical lines from top to bottom: 1.2650 is where the long-term downwards resistance level dating from 2008 meets this month’s levels. Further below, the recent swing high of 1.2555 may serve as resistance. 1.2537 is the peak in late January 2018 that didn’t hold for a long time. 1.24515 was a temporary cap for the pair in January 2018. 1.2350 provided support to the pair in early February and now switches to resistance. 1.2260 was a support line in mid-February. 1.22 is a round number and also a level of comfort in February. The 2017 peak of 1.2090 remains essential. 1.20 is the obvious round level and also worked as resistance in September. 1.1950 was the high level seen in November and a stepping stone towards 1.20. 1.1860 capped the pair in August and in October while working as support in September. I turn from bearish to bullish on EUR/USD The consolidation of the euro may have run its course, with the US dollar recovering from the lows. A reminder of the euro-zone’s economic strengths and perhaps a relatively dovish public appearance from Powell may stabilize the pair. Our latest podcast is titled Volatility is back with a vengeance and the perky pound 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 GBP/USD Forecast Feb. 26 – Mar. 2 – May’s speech in focus Yohay Elam 5 years EUR/USD had a more moderate week, ending on lower ground. Will it continue falling or is it only a correction? A speech by Draghi and inflation figures are in the limelight. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD. Both the IFO and ZEW German business surveys disappointed and so did euro-zone PMIs. The forward-looking figures still point to growth though. In the US, the FOMC Meeting Minutes showed a relatively hawkish stance, boosting the US dollar and setting the tone for the week. 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