EUR/USD suffered from the ECB’s dovish stance but never went too far. What’s next? Inflation and GDP figures stand out. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD. ECB President Mario Draghi clarified that they will not raise rates until September 2019, by saying that only the English version is the valid one. By dismissing speculation about an earlier rate increase, Draghi dragged the euro lower. Flash PMI’s and Germany’s IFO survey were more or less in line with expectations. US GDP came out at 4.1% annualized in Q2, the best in four years, but slightly below the hyped up expectations. President Trump took a victory lap and also changed tack on trade. He had a successful meeting with EU Commission President Jean-Claude Juncker in which they agreed to negotiate lower tariffs and also to refrain from adding new ones during the talks. [do action=”autoupdate” tag=”EURUSDUpdate”/]EUR/USD daily chart with support and resistance lines on it. Click to enlarge: German CPI: During the European morning from Germany’s states and the all-German number is due at 12:00. The preliminary publication of inflation figures in the continent’s largest economy has a significant impact on the numbers for the whole euro-zone. After a monthly increase of 0.1% in June, a faster clip of 0.4% is expected for July. Spanish CPI: Monday, 7:00. The euro zone’s fourth-largest economy saw headline annual inflation extending its gains and reaching 2.3% in June. A repeat of the same number is on the cards for July. German Retail Sales: Tuesday, 6:00. Consumers have reduced their spending in May. The sharp drop of 2.1% was a big disappointment back then. A bounce is predicted for June: 1.1%. French CPI: Tuesday, 6:45. The final French inflation figure for June was flat, weighing on the overall number. This time, a slide of 0.3% is expected in prices in Europe’s second-largest economy. Spanish GDP: Tuesday, 7:00. After French GDP slightly disappointed, Spain’s read is expected to remain robust with 0.7% in the preliminary read for Q2, a repeat of the level seen in Q1. German Unemployment Change: Tuesday, 7:55. Germany continues enjoying a constant drop in the number of the unemployed. After a fall of 15K in May, a mildly more moderate drop of 10K is expected for June. Euro-zone inflation: Tuesday, 9:00. The recent figures for June have shown a divergence between headline inflation and core inflation. Headline CPI advanced to 2% y/y, buoyed by rising oil prices. On the other hand, core inflation slipped to 0.9%, showing that the underlying situation has not changed. We will now receive the preliminary data for July which is projected to show 2% on the headline once again and a tick up in core CPI to 0.9%. Euro-zone GDP: Tuesday, 9:00. The euro-zone slowed down in the first quarter of 2018 after an excellent 2017. This was attributed to temporary factors. A repeat of the same number is on the cards for Q2. Unemployment Rate: Tuesday, 9:00. The jobless rate in the euro-zone has been falling gradually in the past few years. After hitting 8.4% in May, another tick down to 8.3% is forecast for June. Manufacturing PMI’s: Wednesday, 7:15 for Spain, 7:45 for Italy, final French figure at 7:50, final German number at 7:55 and the final euro-zone measure at 8:00. Markit’s forward-looking measure for Spain’s manufacturing sector stood at 53.4 points in June, above the 50-point threshold separating expansion and contraction. A small slide to 53.1 is on the cards for July. Italy’s figure was 53.3 and also here, expectations are for 53.1 points. The preliminary measure for France for July was 53.1, for Germany a robust 57.3, and 55.1 for the euro-zone. The preliminary numbers will likely be confirmed. Spanish Unemployment Change: Thursday, 7:00. Spain saw a significant drop in its unemployment rate in Q2, but above 15%, it still remains high. The fresh monthly gauge of the number of the unemployment provides further insights. A drop of 90K was recorded in June and another fall is likely for July, in the peak of the tourism season. PPI: Thursday, 9:00. Producer prices eventually feed into consumer prices. A jump of 0.8% was seen in May and a more modest increase of 0.3% is estimated for June. Services PMI’s: Friday morning. Spain at 7:15, Italy at 7:45, the final French figure at 7:50, final German number at 7:55, and the ultimate euro-zone measure at 8:00. Spain’s services sector enjoyed relatively upbeat growth in its services sector in June with a score of 55.4 points. A small slide to 54.4 is on the cards now. Italy is also predicted to see a drop from 54.3 to 53.8 points. The preliminary read for France in July was 55.3, for Germany 54.4 and for the euro-zone 54.4 as well. The initial numbers are forecast to be confirmed. Retail Sales: Friday, 9:00. The overall retail sales numbers for the euro-zone come after the main countries will have published their own. Nevertheless, the data tends to provide surprises. After remaining flat in May, an increase of 0.4% is expected for June. * All times are GMT EUR/USD Technical Analysis Euro/dollar kicked off the week with a slide from the highs. It eventually dropped to around the 1.1625 level mentioned last week before stabilizing. Technical lines from top to bottom: 1.2060 was the low point in late April and it is the last barrier before the round number of 1.20. The round number of 1.19 is also notable as a pivotal line in the range and it also temporarily held the pair back in late 2017. 1.1845 was the high point in early June. Further down, the 1.1820 level was a stubborn support line in late 2017. 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, 1.1510 is the new 2018 low and also a ten-month trough. Further down, 1.1480 served as support back in July 2017. I remain bearish on EUR/USD We heard from the dovish ECB and inflation figures are unlikely to change their minds. In the US, the Fed will likely remain optimistic after the GDP data. All in all, monetary policy divergence will likely keep the pressure on the pair. Our latest podcast is titled Festive Fed, Dovish Draghi, and a global trade war 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 USD/CAD Forecast Jul. – Aug. 3 – NAFTA hopes lift CAD, GDP eyed now Yohay Elam 5 years EUR/USD suffered from the ECB's dovish stance but never went too far. What's next? Inflation and GDP figures stand out. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD. ECB President Mario Draghi clarified that they will not raise rates until September 2019, by saying that only the English version is the valid one. By dismissing speculation about an earlier rate increase, Draghi dragged the euro lower. Flash PMI's and Germany's IFO survey were more or less in line with expectations. 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